NVIDIA Corporation (NVDA) Products Are Best of Breed: RBC Capital

RBC Capital Shines Light on NVIDIA's Q2 10-Q

RBC Capital analyst Mitch Steves recently took a close look at NVIDIA Corporation’s (NASDAQ:NVDA) 10-Q filing for the second quarter of fiscal 2018, and provided some analysis on what he found.

The following bullets contain highlights from Steves’ note:

  • “We believe Nvidia products are best of breed and if GPU chips continue to sell well we think this is due to 1) a scarcity pocket due to crypto-currency miners last quarter and 2) continued gaming demand for the newest high-end products by Nvidia.”
  • “Some lingering demand remains from cypto-currencies ~$40-45M thus far assuming similar demand based on the Ethereum network rate.”
  • “The Company reiterated the Toyota win in the filing (Volvo and Autoliv Drive PX self-driving to hit the market in 2021) and we think this is a signal for continued unit increases over the next ~2 years.”
  • “While difficult to track near-term, we think the mention of initial Volta shipments is a positive given that card replacements should ramp through the quarter. In addition, we are confident in DGX-1V shipments/sales through FYQ3.”

Net Net, the analyst believes the most positive item is the continued demand for gaming chips (a near-term investor concern) along with the note about initial Volta shipments in the filing.

Steves rates Nvidia an Outperform with a price target of $175, which represents a potential upside of 7% from where the stock is currently trading. (To watch Steves’ track record, click here)

TipRanks analytics demonstrates NVDA as a Buy. Out of 25 analysts polled in the last 3 months, 16 are bullish on NVIDIA stock, 6 remain sidelined, and 3 are bearish on the stock. However, with a downside potential of nearly 7%, the stock’s consensus target price stands at $152.45.


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