Nvidia’s Stock (NVDA) Just Got A Rare ‘Double Upgrade’

Nvidia calls its new 'Turing' architecture the biggest leap since the company introduced CUDA in 2006.

Nvidia Stock - NVDA

Nvidia‘s (NASDAQ:NVDA) stock price rose 4 points in early trading Tuesday following the chipmaker’s unveiling of its eighth-generation ‘Turing’ graphics architecture at a conference targeting computer graphics professionals.

“Turing is NVIDIA’s most important innovation in computer graphics in more than a decade,” Nvidia CEO Jensen Huang said at the SIGGRAPH conference in Vancouver, Canada, according to a company release. “Hybrid rendering will change the industry, opening up amazing possibilities that enhance our lives with more beautiful designs, richer entertainment and more interactive experiences. The arrival of real-time ray tracing [realistic-looking light and shadow effects] is the Holy Grail of our industry.”

Shares of Nvidia have soared by more than 56 percent over the past year, far outpacing the 14.5 percent gain of the S&P 500. The stock, currently trading at 33x forward earnings, is up 31% so far in 2018.

Raymond James’ Chris Caso is optimistic Nvidia’s eighth-gen GPU architecture, which the company says “is the result of more than 10,000 engineering-years of effort”, will drive the company’s sales later this year.

“We expect the new gaming product cycle to be a catalyst for Nvidia’s stock in 2H18,” Caso said in a Tuesday note to clients as he reiterated his “outperform” rating and $300 price target for Nvidia shares.

Last week, Nvidia’s price target was raised to $324 from $310 at Goldman Sachs (NYSE:GS). In a note to clients, Goldman analyst Toshiya Hari said that while he expects the company to report a “noisy” second-quarter with the focal points being the disruption from the virus attack at TSMC and weakness in cryptocurrency mining (Q2/19 crypto-related revenues could be about one-third of the first-quarter level), his long-term bull thesis on the name remains intact. Hari reiterated a “Buy” rating on the shares.

In other ratings news, Wells Fargo’s Aaron Rakers upgraded this morning his NVDA rating two notches to ‘Outperform’ from ‘Underperform’, citing the company’s AI/deep learning data center growth and cloud computing market strength. The analyst, who also raised his price target on the name to $315 from $140, said he believes the chipmaker “is well positioned to continue to leverage / expand its platform story.”

Nvidia is scheduled to release its Q2/19 financial report after the market closes on Thursday, Aug. 16. In the past 10 quarters the Santa Clara, Calif.-based company has handily beat Street estimates.

Will the trend continue?

Nvidia’s market cap exceeds $158 billion, and its shares closed Tuesday up $5.31 at $261.43.

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