We Are Buyers on NVIDIA Corporation (NVDA) Ahead of 4Q Print: Top Analyst

Top analyst Rajvindra Gill at Needham is out with a bullish research report on NVIDIA Corporation (NASDAQ:NVDA) ahead of anticipated fourth-quarter earnings due this evening, betting on the long game for the chip giant. As such, the analyst reiterates a Buy rating on shares of NVDA with a $120 price target, which represents a just under 2% increase from current levels.

For the fourth quarter, the analyst projects Gaming will experience 6% quarter-over-quarter growth to $1,319MM and Automotive will rise 13% quarter-over-quarter to $143M, which would mean a beat compared to consensus expectations of $1,304M for Gaming and $135M for Automotive. In particular, with the chip giant’s gaze set on competitive gaming as well as Infotainment and Advanced Driver Assistance Systems (ADAS) in the Automotive market, Gill predicts the giant is set to “do particularly well” in the print. The analyst believes, “For FY1Q18 we continue to be bullish on Gaming, relative to a seasonally weak quarter (-10% Q/Q).” Additionally, the analyst expects the giant to close the fiscal year with a data center business circling $1 billion in revenue run-rate coupled with an $800MM run-rate in its automotive business closing out the fiscal year of 2019.

“We upgraded NVDA to Buy (11/14/16), because we saw it as one of the few open-ended growth stories in technology. It is well-positioned to capitalize on several multi-billion TAMs: 1) Machine Learning / Deep Learning in data centers and enterprise ($10B TAM out of $37B overall AI mkt); 2) trend toward fully autonomous vehicles ($6-8B out of $10 trillion transportation industry) and 3) VR/AR. NVDA has an “end-to-end” platform to accommodate a new AI computing model with engagements in 19k organizations (retail ASP ~$5k). Specifically, NVDA is dominant across all stages of machine learning. While we see potential upside to N-T estimates (reports on 2/9) in gaming and auto, we see NVDA as a long-term play on these seismic technological trends happening across every industry, and as such we would be buyers post-print,” Gill contends.

Rajvindra Gill has a very good TipRanks score with a 63% success with a high ranking of #54 out of 4,384 analysts. Gill garners 15.7% in his annual returns. When recommending NVDA, Gill yields 13.4% in average profits on the stock.

TipRanks analytics demonstrate NVDA as a Buy. Out of 28 analysts polled by TipRanks in the last 3 months, 16 are bullish on NVIDIA stock, 10 remain sidelined, and 2 are bearish on the stock. With a loss potential of nearly 6%, the stock’s consensus target price stands at $111.10.

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