Nasdaq NVDA Nvidia

Nvidia made some key announcements at its Investor Day on April 12. The graphics card company said that its 1Q FY22 revenue was tracking above its earlier announced outlook with “outperformance in each of its market platforms”.

Nvidia’s (NVDA) executive vice president and chief financial officer Colette Kress said, “While our fiscal 2022 first quarter is not yet complete, Q1 total revenue is tracking above the $5.30 billion outlook provided during our fiscal year-end earnings call. We are experiencing broad-based strength, with all our market platforms driving upside to our initial outlook.”

NVDA raised 1Q revenue estimates for its new cryptocurrency mining processor (CMP) product used in cryptocurrency mining from $50 million to $150 million.

The company also announced the launch of eight new NVIDIA Ampere architecture GPUs that can be used in laptops, desktops and servers and make it possible for professionals to handle demanding workloads.

Additionally, NVDA said that Volvo Cars (VLVLY) , Zoox and SAIC are using Nvidia Drive – the company’s software-based end-to-end platform for autonomous vehicles. According to NVDA, its automotive pipeline is now in excess of $8 billion for the next six years.

The company unveiled NVIDIA DRIVE Atlan – a data center that consists of autonomous vehicle’s entire computing infrastructure “into a single system-on-a-chip”.

Following the Investor Day presentation, Needham analyst Rajvindra Gill reiterated a Buy and a price target of $800 on the stock. Gill said in a note to investors, “Gaming has continued to show strength, although the CFO additionally remarked that all segments will be contributing more significantly to Q/Q growth, which is likely what led to the company raising its Q1 revenue outlook to be higher than previous guidance. This is also in part due to supply availability being better than expected, and the company expects this will continue to improve throughout the year.”

The rest of the Street is bullish on the stock with a Strong Buy consensus rating based on 23 analysts suggesting a Buy and 4 analysts recommending a Hold. The average analyst price target of $656.80 implies approximately 8% upside potential to current levels.

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Nvidia (NVDA) will kick off the week with its annual Analyst Day. While RBC’s Mitch Steves doesn’t expect the company to meaningfully alter its guidance or long-term outlook, the analyst has made a list of items investors should look out for.

Of most interest to Steves, will be the Q&A segment, which should provide “incremental data points” around Data Center, Automotive and Ethereum Mining.

The latter, especially, is expected to make a positive quarterly impact as part of Nvidia’s main revenue driver - the gaming division.

Steves anticipates a significant beat within the segment, boosted by a surge in Ethereum mining. While not gaming per se, mining involves GPUs, and Steves explains how Nvidia stands to benefit from the current bullish crypto environment.

“Using information from the public blockchain data we can see that the Ethereum Hash rate has increased by 163,533 GH/s from January 31 to April 8. This represents the amount of computing power being added to the network, and if we assume a $699 ASP with an average hash rate of 100MH/s it results in ~$1.15B in total revenue,” the 5-star analyst noted. “Roughly 2/3 of this likely comes from NVDA GPUs, and we take another 66% cut of the revenue line due to distribution, which results in ~$500M so far in the quarter.”

Crypto mining is already old hat when compared to another trend set to become increasingly lucrative. Steves notes the change in investor interest around the “inflection point for self-driving cars/self-driving NVDA content.” The analyst expects “meaningful revenue” from this opportunity for Nvidia’s Automotive segment by 2023.

Elsewhere, Steves says “product cycle comparisons from last year and the Mellanox transaction” have investors expecting Data Center revenue to drop. Steves isn’t worried here, though, and believes “demand remains healthy.”

So, that’s nice for Nvidia, but what does it all mean for investors? Steves rates NVDA as Outperform (i.e., Buy) backed by a $610 price target. There’s modest upside of 6% from current levels. (To watch Steves’ track record, click here)

The rest of the Street is more upbeat. The forecast is for 12-month gains of 12.5% given the average price target stands at $647.88. Rating wise, Nvidia remains a Wall Street favorite; based on 24 Buys vs. 4 Holds, the analyst consensus rates the stock a Strong Buy. (See Nvidia stock analysis on TipRanks)

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.