Not for the first time, the superlatives are piling up for Nvidia (NVDA) following the chip giant’s exceptional July quarter earnings.
That said, you will be hard pressed to find a more enthusiastic reception to the results than that of Rosenblatt analyst Hans Mosesmann, who says Nvidia is on “an entirely different plane vs. other semiconductor companies.”
So, what did Mosesmann like about the quarter’s display? Perhaps a better question might be: what not? With the ongoing uncertainty around the ARM deal aside, the answer would be, not much.
First off, there were naturally beats on both the top-and bottom-line numbers. Non-GAAP EPS of $1.04 came in $0.02 ahead of the estimates, while revenue increased by 68.2% year-over-year to reach $6.51 billion, in the process beating the Street’s call by $170 million.
The outsized sales were driven by growth in almost all segments, including record revenues in Gaming ($3.06 billion, up 85% from the same period a year ago), Data Center (up by 35% to $2.37 billion), and Professional Visualization. Supply continues to outstrip demand in the Gaming segment, while the Data Center growth was “primarily from hyperscale customers building infrastructure to commercialize Ai in their services.”
Moving forward, the company’s outlook is a confident one too. For the October quarter, Nvidia anticipates revenue of $6.80 billion, a 4.5% sequential uptick and above the consensus estimate of $6.48 billion. All end-markets should see growth in the next quarter, with Data Center poised for “accelerated demand.”
More than the array of impressive metrics, Mosesmann believes the results reflect the “overall alignment of many years of architectural, hardware, and software efforts into the current transition of AI ‘training’ to AI production or inferencing.”
The analyst says the rise of AI could amount to the “biggest technology inflection ever,” calling it the “Mother-of-all-Cycles.” No prizes here for guessing who will lead the charge as the “premier AI play.”
To this end, Mosesmann boosted his price target on NVDA from $250 to a Street high of $300. Investors could be pocketing gains of 57%, should Mosesmann’s thesis play out accordingly in the year ahead. (To watch Mosemann’s track record, click here)
Nvidia remains a firm favorite on Wall Street. Barring 1 Hold and Sell, each, all 28 other recent reviews say Buy, culminating in a Strong Buy consensus rating. Shares are expected to be changing hands for a 11.5% premium 12 months from now, given the average price target stands at $225.44. (See NVDA stock analysis on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
For most of 2021, the global chip shortage has been a thorn in the side of several industries. Supply chain issues are persisting for auto manufacturers, computer makers, and smartphone producers. As many companies in these sectors attempt to mitigate the supply constraints, the actual firms producing the chips are experiencing massive demand, which is expected to continue well into the year. The Nvidia Corporation (NVDA) printed another strong quarter yesterday, and analysts are raising outlooks in kind. (See Nvidia Corporation stock charts on TipRanks)
Rajvindra Gill of Needham & Company reported on Nvidia’s positive future, stating that the semiconductor company’s demand “remains robust,” and that its data center and gaming segments are expected to expand as well.
Gill assigned a Buy rating on the stock, and raised his bullish price target from $200 to $245. This new target represents a possible 12-month 28.68% upside from Wednesday’s closing share price of $190.40.
Nvidia’s gross margins continue to see growth, which gives the company more operating leverage and the ability to act with more flexibility.
The five-star analyst explained that although Nvidia’s acquisition deal with technology firm Arm Ltd. has been delayed and potentially has only a 20% chance of success, other factors appear much brighter. Demand for data centers is experiencing growth due to ongoing trends toward cloud-based AI software, and this sector is bringing in significant revenue.
A strong balance sheet, a valuation with room to grow, and Nvidia’s capacity for artificial intelligence "will be crucial during the COVID-19 outbreak, especially regarding medical research and genomics,” wrote Gill.
On TipRanks, NVDA has an analyst rating consensus of Strong Buy, based on 28 Buy, 1 Hold, and 1 Sell ratings. The average Nvidia Corporation price target is $223.77, suggesting a potential 12-month upside of 17.53%.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
After a bearish period, the crypto market is on the up again, but the segment’s volatility remains an issue for those mindful of its impact on Nvidia (NVDA). However, ahead of the chip giant’s July quarter results this evening, Rosneblatt analyst Hans Mosesmann thinks these worries are overblown.
“Although crypto continues to be an area of concern for investors (crypto mining contributed $155 million in revenue in the April quarter and CMP revenues are expected to be $400 million in the July quarter), we believe the company has had success in mitigating RTX GPUs in crypto mining by limiting performance in such workloads,” the 5-star analyst said. “This points to a much more benign Crypto cycle this go-around, we believe.”
In fact, Mosesmann expects “strength across the board,” with a particularly robust showing from Nvidia’s two main revenue drivers, Gaming and Data Center. The analyst anticipates the quarter’s sales will better both his and the consensus estimates of low double-digit sequential growth.
Outsized growth is expected to be on the menu for the company’s October quarter guidance too, and Mosesmann thinks the outlook will improve upon his and the Street’s estimate of mid-single-digit quarter-over-quarter growth for the top-line and EPS of $1.05/$1.06, respectively.
More ray tracing adoption, “continued momentum” in the Automotive segment and healthy data center sales from the “continued adoption of Ampere and hyperscaler spending” are expected to drive the gains.
On the earnings call, Mosesmann will be looking for details on the progress regarding the Grace CPU/3-product strategy, and more color on the ongoing ARM acquisition shenanigans. Nvidia has also said it anticipates supply constrains will remain into the second half of the year, so more info regarding this issue will also be welcome.
All in all, Mosesmann remains keen on all things Nvidia. “We continue to like the Nvidia story and see the company as the best-in-class AI play with growth vectors into next generation networking/DPU adoption and early-days of autonomous driving S/W kicker,” the analyst summed up.
Unsurprisingly, then, Mosesmann sticks to a Buy rating and backs it up with a $250 price target. Investors are looking at returns of 25% from current levels. (To watch Mosesmann’s track record, click here)
Nvidia gets a lot of love from Wall Street’s analyst corps; the stock has a Strong Buy consensus rating with only 1 out of 29 recent reviews suggesting to Hold and all others recommending to Buy. After this year’s mighty share haul (up 50%), the stock has ~10% upside before it reaches the $212.29 average price target. (See NVDA stock analysis on TipRanks)
To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.