Top analyst Vijay Rakesh at Mizuho is out with a bullish call on NVIDIA Corporation (NASDAQ:NVDA) following investor meetings with the company’s Chief Financial Officer and Investor Relations at the buzzing annual tech event CES.
Pinpointing the chip giant’s Data Center as a positive short-term prospect coupled with automotive triumphs that have Nvidia positioned at an advantage for the long-term, the analyst reiterates a Buy rating on the stock while hiking the price target from $225 to $240, which implies a close to 8% upside from current levels.
For those who fear the CPU challenges plaguing Intel and AMD, keep in mind that Nvidia’s GPUs have emerged without security issues at bay. The company’s parallel processing units are safe from the Spectre or Meltdown problems, although the analyst notes “there may be patches required in cases where a serial-processed CPU is used alongside GPUs.”
“We believe NVDA remains well-positioned in Data Center with Deep learning and new inferencing platforms such as TensorRT with V100 (delivering 100x performance of a CPU DC, and with parallel processing GPUs not affected by Meltdown/Spectre issues) though price points remain high. NVDA also announced Automotive wins at Baidu, Uber and ZF with new Xavier and Drive PX Pegasus platforms for Level 5,” writes Rakesh, leaving his estimates unchanged.
For fiscal 2019, the analyst projects the giant will yield $10.7 billion in revenue and $4.45 in EPS, reaching $11.7 billion in revenue and $5.20 in EPS by fiscal 2020.
Overall, “NVDA continues to drive performance in Data Center and Automotive and is unaffected by recent CPU drawbacks,” concludes Rakesh.
Vijay Rakesh has a very good TipRanks score with a 75% success rate and a high ranking of #21 out of 4,745 analysts. Rakesh garners 30.9% in his annual returns. When recommending NVDA, Rakesh yields 96.2% in average profits on the stock.
TipRanks highlights Wall Street is split between wanting to hedge its bets on this chip giant and choosing to take the bullish gamble. Based on 23 analysts polled in the last 3 months, 11 rate a Buy on Nvidia stock, 11 maintain a Hold, while 1 is bearish on the stock. Is the stock overvalued or undervalued when taking under account these analyst expectations? Notably, with a loss potential of 3%, the stock’s consensus target price stands at $215.60.