Nvidia (NVDA) Stock Scores a Price Target Hike from a Top Analyst; Here’s Why

The key cloud players are increasingly looking at artificial intelligence services to offer their customers; that means that deep-learning supercomputers like the DGX-2 will likely grow more along with this expanding market.

Mizuho’s top analyst Vijay Rakesh believes DGX-1/2 ramps should be a positive for Nvidia (NVDA) and, as such, reiterates a Buy rating on the stock, while lifting the price target to $295 (from $280), which implies a potential upside of 8% from where the stock is currently trading.

Rakes stated, “For NVDA L-T Data Center with DGX-1 and DGX-2 will be key. The Data Center segment grew JulQ revenue to $760M in F2Q19, up 83% y/y and 8% q/q. NVDA noted its flagship Tesla V100 GPU ramping for both AI and HPC, and noted Volta has been adopted by every major cloud provider and hyperscale data center operator. NVDA also noted customers are in the process of qualifying the 32GB V100 chip to support larger neural networks with major server OEMs, HP Enterprise, IBM, Lenovo and Supermicro all ramping. DGX also continues to ramp, with annual revenue run rate in the hundreds of millions with DGX2 announced in March currently being qualified with NVDA expecting a F3QE(OctQ) ramp.”

“While current OctQ/JanQ F19E are moderate versus F18A, we believe DGX-1/2 ramps should be a positive. Adjusting our PT up to $295, though N-T there are some headwinds in gaming and inventory,” the analyst concluded.

According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Vijay Rakesh has a yearly average return of 25.4% and a 64.5% success rate. Rakesh has a 88.7% average return when recommending NVDA, and is ranked #58 out of 4874 analysts.

The initial word out on the Street echoes Rakes’ bullish conviction on the GPU and AI giant, as TipRanks analytics showcase NVDA as a Buy. Based on 24 analysts polled in the last 3 months, 17 are bullish on ths stock, while 7 remain sidelined. The 12-month average price target stands at $291.79, marking a 6.5% upside from where the stock is currently trading. (See NVDA’s price targets and analyst ratings on TipRanks)


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