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Harriet Lefton

About the Author Harriet Lefton

Harriet originates from the UK where she worked as a journalist specializing in the metal markets. She graduated from the University of Cambridge before becoming a qualified UK lawyer.

Nvidia (NVDA) Remains an Attractive, Defensive Stock


The PHLX Semiconductor Index fell 1.8% on July 3 just before the market closed, after chip giant Micron was put under hot water when word got out of a Chinese court putting a block on sales in China of the company’s memory-chip products.

Fears are growing among investors apprehensive of a brewing trade war between U.S. and China. The latest piece of the puzzle will surely leave some running for the hills on semiconductor stocks. However, chief market analyst Michael Hewson at CMC Markets is staying bullish. Hewson believes that when sizing up the impact of a long-term trade war, “actually if you look at the data we’re seeing, the economic data is not that bad.” While Hewson admits not only “could it,” but “it will have a drag,” he counters: “But will it push the global economy into recession? Not yet.”

Analysts Around the Street Are Mostly Upbeat on NVIDIA

Consider that Benchmark’s top analyst Mike Burton just initiated coverage on Nvidia  (NASDAQ:NVDA) with a Buy rating and a $280 price target, which implies a confident 10.5% in upside potential from where the shares last closed. (To watch Burton’s track record, click here)

As far as Burton is concerned, the chip player stands at an advantage, “in the middle of many of the hottest computing trends.” Even if Burton sees the stock as somewhat expensive, he calls for Nvidia to outperform estimates on the back of “sustainable” growth-driven demand thanks to core data center markets along with a slated Volta product cycle for consumer GPUs.

FBN Securities analyst Shebly Seyrafi likewise joins the bullish camp, initiating coverage on Nvidia with an Outperform rating and a $300 price target, which implies over 18% in return potential. (To watch Seyrafi’s track record, click here)

“While Nvidia was once a GPU machine, it since has become a “platform company,” writes Seyrafi. The analyst likes the odds on “one of the few plays on artificial intelligence and machine learning, key trends which are beginning to take off.”

Overall, we can see that NVDA has a relatively positive Moderate Buy analyst consensus rating. This breaks down into 17 Buy ratings and 7 Hold ratings in the last three months. Meanwhile, the $292.81 price target suggests an upside potential of 16% from the current share price.

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