NVIDIA Corporation (NVDA) Gets a Price Target Lift on Expected Gaming Platform Strength

Second fiscal quarter results are coming this Thursday from NVIDIA Corporation (NASDAQ:NVDA) and investors are already on the edge of their seats, sending shares rising 3% yesterday and continuing to scale the charts today.

B. Riley analyst Craig Ellis is throwing his bullish hat in the ring with extra conviction, noting that not only did the chip giant’s shares surpass his previous price target, but Nvidia is on a roll, strengthening category leadership with encouraging momentum.

As such, in a confident earnings preview calling for even further execution mastery, particularly as the “Volta era” sets off into motion, the analyst reiterates a Buy rating on shares of NVDA while boosting the price target from $135 to $200, which represents a 15% increase from where the stock is currently trading.

For the second fiscal quarter of 2018, the analyst could see good chances for Nvidia to secure up to $50 to $90 million of upside when glancing at the Street’s expectations calling for a 1.3% rise to $1.964 billion in revenue and $0.81 in EPS. Likewise, the analyst anticipates the chip giant will outperform the Street in third fiscal quarter outlook, considering the Street is calling for a 9% rise to $2.141 billion in revenue and $0.92 in EPS, when the third fiscal quarter based on historical seasonality should be a robust one for Nvidia. Likewise, with surprising rises in Ethereum and Bitcoin prices over the past 3 months, gaming card demand and pricing are seeing a subsequent soar, which further will benefit Nvidia’s chances to bring in upside.

“Our F2Q basis is led by Gaming where four drivers ‐ new products, an on‐track portable console build, e‐sports momentum, and cryto‐currency mining help should lead F2Q upside with Auto and Data Center at least in line. For F3Q we project continued Gaming strength plus Data Center acceleration as Volta starts to ship while Auto could reap some high‐ASP Xavier autopilot shipments. Across each Platform Group NVDA is increasingly moving from discrete GPU’s to full systems where rich software content is well‐rewarded with ASP’s up to 5x the stand‐alone part. More broadly, we believe its increasingly clear NVDA has the leadership position in the auto’s autopilot market, and while AMD $13.12 (NR) bears watching in Graphics, NVDA’s huge CUDA ecosystem creates a huge competitive moat in the data center. Tactically, we acknowledge ‘sell the news’ risk post‐print, but retain a view NVDA offers unique leverage with strong execution into three big secular shifts,” Ellis surmises.

Craig Ellis has a very good TipRanks score with a 73% success rate and a high ranking of #40 out of 4,628 analysts. Ellis garners 27.7% in his yearly returns. When recommending NVDA, Ellis gains 94.5% in average profits on the stock.

TipRanks analytics demonstrate NVDA as a Buy. Out of 27 analysts polled by TipRanks in the last 3 months, 17 are bullish on Nvidia stock, 8 remain sidelined, and 2 are bearish on the stock. With a loss potential of nearly 11%, the stock’s consensus target price stands at $153.70.

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