Analysts Upbeat After Nvidia's CES Presentations: 'Must-Own Stock For Technology Investors'

Even as Needham remains cautious on NVIDIA Corporation NVDA, some peers are upbeat about the prospects for the graphics chipmaker, especially after the Consumer Electronic Show.

The Analysts

Argus analyst Jim Kelleher reiterated a Buy rating on Nvidia and raised the price target from $240 to $300.

Citigroup analyst Atif Malik maintained a Buy rating.

Argus Recommends Establishing or Adding to Positions

Kelleher said Nvidia displayed the breadth of its technological capabilities at CES, highlighting its stand-alone products and in applications powering OEM products and systems.

The show was used to highlight the rapid adoption of Nvidia's ray tracing technology and also display GeForce gaming cards, G-Sync technology that synchronizes display refresh rate with the GPU's frame rate, autonomous vehicles and robots.

Kelleher said the company has left behind the tough comparisons that led to a string of annual revenue and EPS declines.

Nvidia shares, though recovering from the weakness related to the disappearance of cryptocurrency-related revenue, continue to trade below past peaks.

"We recommend establishing or adding to positions in this preeminent vehicle for participation in the AI economy," Kelleher wrote in a note. The firm believes most technology investors should own the stock in the age of deep learning, AI and GPU-driven applications acceleration.

Poised For Outperformance

Nvidia shares are likely to outperform on a relative basis in the next three months, Malik said. The analyst premised his opinion on improving data center demand, the closure of Mellanox Technologies, Ltd. MLNX acquisition and the next-gen 7nm, Ampere platform announcement expected at the flagship GTC conference in March.

The analyst said his January and April quarter EPS estimates are 2% and 5% above consensus, respectively. The Mellanox deal could add 8-10% to the consensus in calendar year 2020.

Malik noted Nvidia shares appreciated about 25% on average three months into the launch of last two Pascal and Turing platforms. Therefore, the impending launch of Ampere should bode well for the stock, it added.

Price Action

Nvidia's stock traded higher by 3% to $251.83 per share at time of publication.

Related Links:

BofA Names Nvidia, Inphi Its Top Semiconductor Stock Picks For 2020

Here's How Much Investing $100 In Nvidia Stock Back In 2010 Would Be Worth Today