What To Expect From Nvidia's Analyst Day

NVIDIA Corporation NVDA's analyst day is Tuesday, and it's likely to be upbeat, according to BMO Capital Markets.  

Nvidia will likely highlight the drivers in its gaming, data center and auto businesses and update shareholders on key financial numbers, analyst Ambrish Srivastava said in a preview note. 

“Among the areas highlighted, we see a particular emphasis on the inferencing market in AI, on updates to the architecture for gaming and on new developments such as ray-tracing for gaming,” Srivastava said.

Ray-tracing technology could be a big winner for Nvidia, the analyst said — "a technology that can bring real-time, cinema-like rendering to content creators and game developers." 

Nvidia is a clear leader in AI training, but inferencing will be a more competitive market, according to BMO.

From a financial standpoint, BMO expects Nvidia to keep focusing on shareholder returns. Nvidia will likely provide some commentary on longer-term operating expenses and gross margins, Shrivastava said. Nvidia recently announced it is returning $1.25 billion to shareholders in fiscal 2019.

Nvidia’s sky-high valuation has BMO on the sidelines with a Market Perform rating and $225 price target, but Srivastava said the stock deserves to trade at a valuation premium to its competitors due to its prime positioning in AI and other high-growth markets.

Nvidia traders seem optimistic heading into the event. The stock was up 2.7 percent at the time of publication Monday; the equity is up more than 1,000 percent in the past three years.

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Photo courtesy of Nvidia.