Analyst Warns Of Timing Issue With Nvidia's Datacenter Launch, But Remains Bullish

NVIDIA Corporation NVDA has had a tumultuous year, but one analyst team sees reason for optimism.

The Rating

Raymond James analysts Chris Caso maintained a Market Outperform rating with a $180 price target.

The Thesis

The analysts’ channel checks, including for the GeForce gaming GPU and 2080 Ti boards, reinforced third- and fourth-quarter expectations.

“Importantly, suppliers indicated there were no quarter-end deals, and no push for revenue late in the quarter — historically, suppliers say NVIDIA will typically make quarter-end deals if sales are running below expectations, and the lack of this activity should be taken as an encouraging sign,” Caso and Fairbanks wrote in a note. They consider the lack of deals a positive sign for the gaming business.

Notably, the channels lacked any indication of an imminent launch of the 7-nanometer datacenter product. As a result, Raymond James expects a product launch in the first or second quarter of 2020 instead of the current quarter.

Caso said, however, that the "difference of a few months naturally doesn't change our longer term view.. but the timing could have an impact on quarterly results."