Nvidia Receives Chinese Approval For Long-Awaited Mellanox Deal

Encouragingly the conditions only require the companies to not add bundles or other “unreasonable” requirements when selling devices in China.

Following the reported approval, Bank of America analyst Vivek Arya reiterated his NVDA buy rating with a $340 price target (17% upside potential).

“Our positive views on NVDA are based on its attractive organic prospects” he told investors.

“However, we believe potentially adding highly complementary Mellanox high-performance computing/networking products could enhance NVDA’s critical data center segment, while adding new opportunities in 5G/edge computing” the analyst added.

Meanwhile Susquehanna analyst Christopher Rolland pointed out that NVDA was confident the deal would close, writing “We believe that NVIDIA already has plans for Mellanox IP in their next DGX system.” He ramped up his NVDA price target from $320 to $330 on March 31.

Indeed, most of the Street shares this bullish outlook on the stock. According to TipRanks, Nvidia has a Strong Buy analyst consensus with 26 out of 30 analysts calling the stock a ‘buy.’ (See Nvidia’s stock analysis on TipRanks).

However, Craig Hallum’s Richard Shannon downgraded Nvidia from hold to buy on April 13, citing the stock’s 19% year-to-date gain. He also slashed his price target from $325 to $300.

Shannon accused Nvidia is “vastly” outperforming the Philadelphia Semiconductor Index- which is currently down 11% since the beginning of the year.

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