Chinese electric vehicle company Nio has teamed up with Nvidia to develop a new generation of automated driving electric vehicles.
Under the terms of the partnership, Nio (NIO) will deploy Nvidia’s Drive Orin system-on-a-chip (SoC) for its new generation of electric vehicles, to offer advanced automated driving tools.
At its annual event on Jan. 9, Nio unveiled the Nvidia (NVDA) Drive Orin-powered supercomputer, dubbed Adam, which is scheduled to first appear in the ET7 sedan that will be introduced in China starting in 2022. According to Nvidia, Orin is the world’s highest-performance AV and robotics processor. The supercomputer-on-a-chip family can process 254 trillions of operations per second (TOPS).
As the first of Nio’s EVs to feature Orin, the flagship ET7 is a high-performance vehicle that accelerates from zero to 100km in only 3.9 seconds. It also features a new 150 kilowatt battery for extended mileage range.
“The cooperation of Nio and Nvidia will accelerate the development of autonomous driving on smart vehicles,” said Nio CEO William Li. “Nio’s in-house developed autonomous driving algorithms will be running on four industry-leading Nvidia Orin processors, delivering an unprecedented 1000+ TOPS in production cars.”
Nio added that Adam signals a major milestone in bringing automotive intelligence and autonomous driving to market, safely and reliably. “With a centralized, software-defined computing architecture, Nio’s next-generation EVs, like the ET7 sedan, will feature the latest AI-enabled capabilities, which are perpetually upgradable after the point of sale,” the EV maker said.
Shares in Nio have exploded 1,607% over the past year, while the stock still scores a Moderate Buy analyst consensus. That’s with an average analyst price target of $50.20, which implies 15% downside potential over the coming 12 months.
Ahead of Nio’s annual day, Deutsche Bank analyst Edison Yu said that the new sedan will likely be aimed at “the mid-size premium segment” and will be the first Nio vehicle to be built on the EV maker’s next generation NP2 platform.
Yu, who reiterated a Buy rating on the stock with a $50 price target, said that he expected the new battery swapping tech to be “faster and cheaper than current stations.” (See Nio stock analysis on TipRanks)
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Cryptocurrencies are once again a hot topic. Naturally, Bitcoin has led the way - its price has climbed to constant new all-time highs over the past weeks. But, hot on its heels, as is customary in the space, the rally has extended to other cryptocurrencies.
While bitcoin is known for its wild swings of volatility, it is actually the steadiest crypto of the lot. Its peaks and troughs are relatively tame compared to other lower capped coins and tokens. Now as the whole space is joining the fray, there could be a lot of upside on offer. The price of Ethereum, for example – second only to bitcoin by market cap – currently stands at $1,190 and could be headed further north. Mining it requires top of the line GPUs.
This should be good news for Nvidia (NVDA), says RBC analyst Mitch Steves.
The company sells the high-end GPUs used to mine crypto and secure the networks – and apart from Ethereum, other currencies such as Monero, Grin, Horizen and Zcash all make use of Nvidia’s offerings.
With the price of Ethereum surging upwards, the 5-star analyst thinks “demand for high-end GPUs (new version) will remain robust through Q1 (assuming the price remains at ~$1,000).”
“This is important,” Steves adds, “As the payback period on a NVDA 3080 is roughly 27-30 days while the payback period of purchasing a 2080 unit (older version) would be ~80-83 days by our current estimates. This is a significant difference in time frame (nearly 3x faster payback time) and the newer chips could be resold closer to retail value in the used market vs. legacy products in our view... Net Net: we're flagging that crypto demand will likely remain in Q1 potentially creating an elevated gaming number for the industry.”
There’s a caveat, though. Ethereum 2.0 mainnet is approaching, when Ethereum will transition from a proof-of-work (PoW) consensus mechanism to proof-of-stake (PoS), which means no GPUs will be needed for mining, thereby removing this revenue stream at some point.
Against this backdrop, Steves reiterates an Outperform (i.e. Buy) rating on NVDA shares, along with a $610 price target. Investors stand to pocket a ~15% gain should the analyst's thesis play out. (To watch Steves’ track record, click here)
Most of Steves’ colleagues agree. Based on 14 Buys, 3 Holds and 1 Sell, the stock has a Moderate Buy consensus rating. The projection is for 18% upside in the coming months, given the average price target stands at $596.65. (See Nvidia 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 analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
Shares of Nvidia Corp. fell almost 6% yesterday after the Competition and Markets Authority (CMA) announced that it would be investigating Nvidia’s $40 billion deal to buy UK-based chip designer Arm Holdings.
Nvidia (NVDA) agreed to buy Arm Holdings in September 2020 from Softbank Group, in a deal that combines NVIDIA’s leading artificial intelligence (AI) computing platform with Arm’s vast ecosystem to create a premier AI computing company.
The CMA will consider whether, following the takeover, Arm has an incentive to withdraw from the deal, raise prices or reduce the quality of its IP licensing services to NVIDIA’s rivals as it assesses the possible effects that the deal may have on competition in the UK.
Andrea Coscelli, chief executive of the CMA, said, “The chip technology industry is worth billions and critical to many of the products that we use most in our everyday lives…We will carefully consider the impact of the deal and ensure that it doesn’t ultimately result in consumers facing more expensive or lower quality products.” (See NVDA stock analysis on TipRanks)
Citi analyst Atif Malik reiterated his Buy rating on Nvidia today and set his price target at $600. This implies upside potential of around 19% from current levels.
Malik sees sustained data center and PC gaming demand recovery in the first half of 2021 and expects NVDA shares to beat expectations despite recent relative underperformance.
Consensus among analysts is a Moderate Buy based on 14 Buys, 3 Holds and 1 Sell. The average price target of $596.65 suggests upside potential of around 15% over the next 12 months.
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