NVIDIA Corporation (NVDA) Well-Positioned to Take Advantage of High-Growth Markets: Susquehanna

The analyst lifts price target on Nvidia, wagering some of Gaming revenue is thanks to Data Center.

Susquehanna analyst Christopher Rolland is hosting a “can’t miss” conference call today to get to the meat of the “best of the best” in the artificial intelligence (AI) community, where the analyst will chat with Adam Geitgey. In this first installment of the analyst’s AI series, details will point to why he has become more positive on one of the semi-conductors poised to benefit from the rising field: NVIDIA Corporation (NASDAQ:NVDA).

Notably, Geitgey carries behind him 15 plus years of experience as an AI programmer, where he has created mammoth systems while guiding hyperscale firm’s development teams, navigating AI-forged speech as well as image recognition.

Of the various inquiries Rolland intends to explore, he intends to probe, “Which specific NVDA or AMD GPUs does Adam use to run his A.I. applications” as well as “How large might the total addressable market for A.I. hardware ultimately become?” among others.

Believing that “[…] a portion of NVIDIA’s Gaming revenue is actually Data Center related and should perhaps carry a higher multiple,” the analyst maintains a Neutral rating on the stock while bumping up the price target from $140 to $155, which implies a just under 9% from current levels. (To watch Rolland’s track record, click here)

“While this multiple is higher than the group average of 16x, we view it as warranted as the company is well positioned to take advantage of flourishing end markets,” explains the analyst, who notes these “high-growth” markets include from AI to data center to automotive. However, considering Rolland acknowledges that “those markets will take some time to develop,” this slow-but-steady pace has him cautiously optimistic on Nvidia from the sidelines “for now.”

Looking ahead, “We look for a pullback to become more opportunistic” on the chip maker, contends Rolland. With “some Data Center revenue classified under Gaming,” revenue that could “be worth billions,” the analyst anticipates this is how investors justify the company’s roughly $98 billion valuation.

Not everyone is ready to go to bat for Nvidia just yet on Wall Street, but optimism circles all the same. TipRanks analytics showcase NVDA as a Buy. Out of 24 analysts polled by TipRanks in the last 3 months, 15 are bullish on Nvidia stock, 6 remain sidelined, and 3 are bearish on the stock. With a loss potential of nearly 8%, the stock’s consensus target price stands at $155.61.

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