What Wall Street Thinks Of Nvidia's Huge Quarter

NVIDIA Corporation NVDA can do no wrong in the eyes of the market, after its big Q3 earnings beat sent the stock higher by nearly 6 percent. But with Nvidia shares an incredible 1,000 percent in just three years, the debate rages on among analysts of just how much upside the stock has left.

Here’s a look at what five analysts had to say about Nvidia following the report.

Nothing But Net

Loop Capital analyst Betsy Van Hees said Nvidia’s quarter was “nothing but net” and that the company exceeded extremely lofty expectations.

“We think the stock will continue to move higher as strong YoY earnings and revenue growth will be fueled by gaming and the ongoing diversification of the model to an end-to-end solutions provider of hardware and software for the rapidly growing data center and automotive end-markets,” Van Hees wrote.

Citi analyst Atif Malik said Nvidia is primed for the coming artificial intelligence boom.

“We continue to like NVDA’s value proposition as a single GPU architecture, end-to-end deep learning, and full stack software approach to solving artificial intelligence problems,” Malik wrote.

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A Shift In Technology

Loup Ventures analyst Gene Munster said Nvidia is at the epicenter of a seismic shift in technology.

“Today, Nvidia’s bread and butter business is around data centers and gaming, but the company will evolve to become the hardware foundation beneath AI, autonomy, and cryptocurrencies,” Munster wrote.

Canaccord Genuity analyst Matthew Ramsay said there’s very little to complain about from Nvidia’s quarter.

“In fact, as applications of highly parallel GPU computing expand and developer tools and artificial intelligence algorithms mature, our positive thesis continues to play out with strong gaming GPU growth expected to continue in Q4/F'18 with the Pascal gaming and Volta datacenter (including Inference) ramps and we believe new trends including deep learning, virtual/augmented reality, and autonomous driving will catalyze new market growth longer term,” Ramsay wrote.

Tigress Financial analyst Ivan Feinseth said the DRIVE PX autonomous vehicle computer is an exciting product for investors to watch. “I continue to believe Nvidia’s strong business momentum will continue, and the stock will trade higher,” Feinseth wrote.

Oppenheimer analyst Rick Schafer said there’s no questioning Nvidia’s execution and AI opportunities. “We continue to marvel at NVDA's ~46% LTM revenue growth, but believe risk/reward remains balanced with shares trading over 40x our CY18E,” Schafer wrote.

Bank of America analyst Vivek Arya said Nvidia now has a path to $10 in annual EPS in the long-term. “Our positive view on Nvidia is based on its underappreciated transformation from a traditional PC graphics chip vendor, into a supplier into high-end gaming, enterprise graphics, cloud, accelerated computing and automotive markets,” Arya wrote.

Some Skeptics Remain

Wells Fargo analyst David Wong said the stock has come too far too fast. “We think the company clearly has strong product offerings positioned in high-growth markets, but we believe this is already reflected in its stock valuation,” Wong wrote.

KeyBanc analyst Michael McConnell said the stock’s valuation is the only concern at this point.

“Strong GPU demand from the cryptocurrency mining market has rapidly depleted excess channel inventory and buoyed strong OEM sales, which offsets our prior concerns regarding gaming segment growth for the remainder of FY18,” McConnell wrote.

BMO Capital Markets analyst Ambrish Srivastava said even the skeptics must give Nvidia credit at this point. “We believe the perfect storm in fundamentals that drove the rarely seen magnitude of earnings upside is ebbing,” Srivastava wrote.

Ratings And Targets

Even after another impressive quarter Wall Street is still mixed on where Nvidia stock is headed from here:

• Citi has a Buy rating and $240 target.
• Wells Fargo has an Underperform rating and $87 target.
• Canaccord Genuity has a Buy rating and $225 target.
• KeyBanc has a Sector Weight rating and no target.
• BMO has an Underperform rating and $135 target.
• Oppenheimer has a Perform rating and no target.
• Loop Capital has a Buy rating and $235 target.
• Bank of America has a Buy rating and $251 target.