Top25-SA-Banner

Can Movie King Spielberg Drive Advanced Micro Devices, Inc. (AMD) and NVIDIA Corporation (NVDA) GPU Sales?

Jefferies' analyst Mark Lipacis believes Steven Spielberg's next dystopian picture could prove to fire up NVDA and AMD high-end graphics processor sales.


What does the king of entertainment have to do with the semiconductor universe? One bull believes that movie-making master Steven Spielberg’s next film Ready Player One, coming out in 16 days, is primed to be a “catalyst” for Advanced Micro Devices, Inc. (NASDAQ:AMD) and NVIDIA Corporation (NASDAQ:NVDA).

The movie is based on a 2011 novel set in 2044, where a virtual escape world exists: OASIS; a world where people can interact through avatars.

Jefferies analyst Mark Lipacis notes that whether initial sales forecasts are small-scale, to put it bluntly, “we’re not sure it matters.”

Wondering if Spielberg will be the “top 2018 salesperson of NVDA and AMD GPUs,” the analyst reiterates a Buy rating on AMD stock with a $19 price target, which implies a close to 64% upside from current levels, while maintaining a Buy rating on NVDA stock with a price target of $300, which implies a just under 20% upside from current levels. (To watch Lipacis’ track record, click here)

This dystopian film “will drive sales of VR headsets that require high-performance GPUs from NVDA and AMD,” predicts the analyst.

Moreover, “The opening weekend ticket sale projections we’ve seen range from $35-to-$60 million, which would pale in comparison to the Black Panther, which came in around $200 million – the 5th highest opening weekend in history according to ‘Boxofficemojo.com’. We note that the early OW projections for Black Panther were ~$85 million. We also think that Ready Player One has the potential to appeal to a electronics game savvy audience that is motivated to have a more immersive experience,” continues Lipacis.

In terms of the scope of virtual reality, the analyst notes that high-end graphics processors are needed here, and this demand aligns with his parallel processing argument.

Ultimately, “We observe that a lot of the demand for increased compute cycles is becoming parallel in nature, like neural networking, gaming, virtual reality and blockchain/ cryptocurrency mining,” Lipacis concludes on a note of confidence for both memory chip giants and GPU prospects ahead.