Nvidia At CES: Oppenheimer's Major Takeaways

NVIDIA Corporation NVDA was one of the biggest gainers in 2016 and 2017 and will be closely followed by investors throughout 2018 to determine if further gains can be seen.

The Analyst

Oppenheimer's Rick Schafer maintains a Perform rating on Nvidia's stock.

The Thesis

Schafer met with Nvidia CFO Colette Kress and IR Director Shawn Simmons at the sideline of the 2018 Consumer Electronics Show and offered the following takeaways from the discussions. The overall tone from management was a "steady as she goes outlook" as Nvidia looks to continue building on its 46 percent revenue growth over the past year.

Here are a few of his takeaways:

• Tax reform will result in a neutral to a positive impact, but additional color will be offered during the February earnings report and conference call.
• Nvidia's Drive Xavier SoC is expected to start production later this year.
• Nvidia believes it has a two-year advantage versus Intel Corporation INTC and Mobileye.
• The company continues to hold a virtual monopoly in data center with its V100.
• Opportunities in the Inference remains in the early stages but the company is working with more than 1,200 partners.
• Management's expertise in parallel processing and AI will allow the company to "capitalize on the burgeoning" data center, AI, and autonomous driving space.

"We applaud management's execution utilizing NVDA's massive parallel processing expertise to position the company as the premier play on secular growth trends in AI and autonomous driving (and gaming)," Schafer said in a note. "That said, we see risk reward as balanced here."

Price Action

Shares of Nvidia were trading lower by more than 1.5 percent Wednesday morning, but recovered to the $222.35 area at time of publication.

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