Needham analyst Rajvindra Gill is getting more bullish on Nvidia (NVDA) shares, after hosting an investor meeting with Mr. Ian Buck, GM of NVIDIA’s Data Center Business and Ms. Simona Jankowski, Director of IR.
The analyst raised his price target to $350 from $325 for NVDA based on increased confidence that the company will begin to take a larger share of the inference market with its new TensorRT Hyperscaler Platform. The new price target is nearly 30% higher than Thursday’s closing price and is the highest target of the 25 analysts who cover NVDA on Wall Street, according to TipRanks, a site that tracks and ranks analysts on their predictions. Gill also reiterated a buy rating for the GPU giant. (See NVDA’s price targets and analyst ratings on TipRanks)
Gill commented, “NVDA stated that a “meaningful” portion of the $760MM quarterly data center revenue came from inference products. We interpret this to be 10%+. Based on our sensitivity analysis, we estimate the TAM for the inference market ranges from $10-$20BN over five years assuming 20MM CPU-based servers will be accelerated with GPUs (1-1) and with an avg. ASP of $500-$1,000. For FY20 (CY19), we assume 20% of CPU-based servers will be accelerated given the increasing demands of diverse AI workloads and that NVDA would capture 25% market share (both assumptions are conservative). As a result, we are layering an incremental $500MM of additional inference revenue in FY20 (CY19): 1MM servers at $500. The new Tesla T4 GPU boasts 320 Turing Tensor Cores and 2,560 CUDA cores and 40x faster than CPUs.”
According to TipRanks, Gill has a yearly average return of 18.7% and a 61% success rate. The 5-star analyst has a 50.5% average return when recommending NVDA, and is ranked #102 out of 4875 analysts.
As of this writing, Nvidia shares are trading at 275.62, up $4.28 or 1.58%.