RBC Capital analyst Mitch Steves just conducted meetings with both investors as well as NVIDIA Corporation (NASDAQ:NVDA) executives, including discussions with Head of Gaming, Jeff Fisher, as well as leader of Investor Relations, Arnab Chanda.
Following these conversations, Steves offers his take on the chip maker, reiterating an Outperform rating on NVDA with a price target of $72, which represents a 15% increase from where the shares last closed. The analyst left with five key takeaways that left him confident in NVDA’s fundamental growth drivers.
First, the company strategizes that with a $200 to $300 price point for Virtual Reality (VR), it could impact game development and adoption.
Second, HMD units have potential to experience an inflection in growth closing out 2017.
Third, NVDA sees ASPs stabilizing if the company can materially enhance the quality VR experience in upcoming years.
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Fourth, the company has maintained its initial 12-month target for an autonomous vehicle built with Drive PX, which the analyst notes will be 8 to 9 months from now.
Finally, “We remain positive on Data Center growth driven by GPU sales,” Steves asserts.
The analyst concludes, “Going forward, we think mix will continue to move toward: (1) Automotive, which should grow at ~70% near-term and continue to grow double digits long-term; (2) Gaming should grow single digits long-term; and (3) HPC and Cloud (Tesla) should also grow single digits. Finally, we think the Enterprise segment (Quadro and GRID) will see flattish trends.”
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, three-star analyst Mitch Steve is ranked #1,463 out of 4,129 analysts. Steves has a 74% success rate and yields 4.1% in his annual returns. When recommending NVDA, Steves earns 25.6% in average profits on the stock.
TipRanks analytics exhibit NVDA as a Buy. Based on 21 analysts polled in the last 3 months, 12 rate a Buy on NVDA, 7 maintain a Hold, while 2 maintain a Hold. The 12-month average price target stands at $65.41, marking a nearly 5% upside from where the stock is currently trading.