Nvidia At CES: 3 Big Announcements Leave Investors With 5 Major Questions

Providing takeaways from the Consumer Electronics Show, RBC Capital Markets delved on the three major items unveiled by NVIDIA Corporation NVDA and five key investor questions.

3 Big Announcements

Analysts Mitch Steves and Amit Daryanani noted that Nvidia announced a partnership with Audi to create an AI car, the new Shield advanced Streamer product and a new GeForce NOW for MAC and PC.

RBC Capital elaborated on these products:

• Nvidia is looking to have Audis with Level 4, which refers to fully driverless vehicles outside of extreme conditions by 2020.
• On Streamer, the new product will be built with streaming support for 4K content and Alphabet Inc GOOG GOOGL Google Assistant, priced at $199 for Shield.
• The new GeoForce allows for streaming games directly to Facebook Inc FB Live.

5 Remaining Questions

Based on its discussions, RBC Capital Markets listed five top investor questions to the company:

1. Will gaming grow in calendar year 2017?
2. Will a competitor such as Advanced Micro Devices, Inc. AMD begin to eat into Nvidia's growth trajectory this year?
3. Will autonomous driving become a meaningful piece of revenue within the next year?
4. How large is the Artificial Intelligence opportunity?
5. What is the new gross margin profile post-IP roll-off?

Net-net, RBC Capital Markets said it remains bullish on Nvidia, as it remains the premier public pure play on AI, with notable product lines addressing virtual reality and autonomous driving as well. The firm said it is most impressed by the Audi partnership creating a clear timetable to driverless vehicles by 2020.

RBC Capital Markets has an Outperform rating on the shares of Nvidia.