NVIDIA Corporation NVDA reported strong fiscal year 2021 first-quarter results Thursday after the close, sending the chipmaker's stock higher Friday.
The Nvidia Analysts
UBS Securities analyst Timothy Arcuri maintained a Buy rating on Nvidia shares and raised the price target from $330 to $400.
BofA Securities analyst Vivek Arya reiterated a Buy rating and increased the price target from $360 to $420.
Oppenheimer analyst Rick Schafer reiterated an Outperform rating and lifted the price target from $350 to $400.
Mizuho Securities analyst Vijay Rakesh reiterated a Buy rating and increased the price target from $295 to $400.
Wedbush analyst Matthew Bryson maintained an Outperform rating and raised the price target from $340 to $420.
Raymond James analyst Chris Caso reiterated a Buy rating and moved up the price target from $330 to $370.
RBC Capital Markets analyst Mitch Steves maintained an Outperform rating and $385 price target.
Rosenblatt Securities analyst Hans Mosesmann maintained a Buy rating and lifted the price target from $340 to $400.
Needham analyst Rajvindra Gill maintained a Buy rating and increased the price target from $360 to $400.
Nvidia Is a Franchise Holding, UBS Says
Nvidia's report delivered solid guidance and framed the new 7nm product cycle against the transformational longer-term opportunity around Mellanox, Arcuri said in a Friday note.
The Ampere GPU brings the biggest generational leap in computational horsepower in Nvidia's history, blurring the lines between its training and inference opportunities, the analyst said.
UBS still sees Nvidia as a franchise holding, with some headroom as the transformational aspects of Mellanox and the Ampere product cycles take hold.
BofAOn Why Nvidia Is Its Top Sector Pick
Nvidia's multi-cylinder growth in the wake of EPS growth potential in cloud/AI/networking/5G, synergistic Mellanox/Cumulus acquisitions, disruptive Ampere-based pipeline and best-in-class execution makes it a top sector pick for BofA, Arya said in a Thursday note.
The analyst noted that first-quarter sales climbed 39% year-over-year to $3.08 billion, ahead of the consensus, and the second-quarter organic implied sales outlook of $3.15 billion is toward the high end of the consensus.
Arya expects year-over-year data center sales growth to accelerate from 80% in the first quarter to 90% in the second quarter as the mix changes to Ampere.
BofA also highlighted the company's stellar gross margin execution, which came in at a record 66% despite the start of the transition to new Ampere GPU architecture.
See also: Here's How Long It Took Nvidia To Reach A $100B Market Cap
Nvidia's Growth, Margin Story Remains, Oppenheimer Says
The data center growth was led by growing adoption of AI accelerators for training/inference with T4 (inference) doubling year-over-year, Schafer said in a Friday note.
The analyst sees COVID-19 as a continuing drag, particularly for Auto and Pro Visualization. The second quarter is likely to be the trough for autos, he said.
The Ampere GPU bolsters Nvidia's AI lead, while the Mellanox acquisition expands its data center footprint, Schafer said.
"We expect management to introduce Ampere for GeForce in 2H, furthering leadership in high-performance gaming."
Oppenheimer sees the growth/margin story as continuing.
Nvidia Well-Positioned For Calendar 2020 and Beyond, Mizuho Says
The April quarter top-line was driven by strong data center and gaming, which was up 27%, Rakesh said in a Friday note.
Nvidia sees continued data center and gaming strength in the second quarter, with a new hybrid training and inferencing platform with Ampere A100 GPU ramping combined with the Mellanox contribution, the analyst said.
Mizuho is of the view that continued strong gaming and AI leadership in data center positions NVDA well for 2020 and beyond.
Nvidia To Enjoy Outpaced Growth For Foreseeable Future, Wedbush Says
Wedbush said a combination of leadership in both AI and gaming silicon will allow Nvidia to enjoy outpaced growth for the foreseeable future, particularly with Ampere positioned to potentially accelerate data center growth by allowing the company to penetrate new markets such as Big Data Analytics and Edge AI, Bryson said in a Friday note.
The analyst noted that data center achieved the quarterly run rate of $1 billion, thanks to strong 80% growth, and gaming revenues came in-line. As negatives, he highlighted the higher-than-expected interest expense and the worse-than-expected 40% decline the company forecast.
RayJay Favors Nvidia In A Post-COVID World
Despite the COVID-19 impact, Nvidia posted strong results and guidance, as gaming proved resilient and the new Ampere product contributed solidly to the data center segment, Caso said in a Thursday note.
The analyst said he has high conviction in the strength of NVIDIA's product cycles — data center followed by gaming in the second half.
"And those product cycles are more resistant to macro conditions than most anything else in our space, which is why we have and continue to favor the stock in a post-Covid world."
Margin Expansion Opportunity Justifies Nvidia's Multiple, RBC Says
While the quarter was strong, the guidance was a tad light when adjusted for Mellanox, Steves said in a Thursday note.
The analyst presented investor feedback on the results, with some investors suggesting they anticipated better quarter-over-quarter data center growth guidance.
Gaming will likely have further upside if work-from-home continues and gross and operating margins have not peaked, helping justify the current multiple, the analyst said, citing investors.
Rosenblatt Recommends Nvidia As Accelerated Computing Pure Play
Nvidia easily sidestepped COVID-19-related disruption in gaming and is delivering a strong ramp of the new 7nm-based Ampere A100 in data center, which was reflected in the first-quarter beat and the strong second-quarter guidance, Mosesmann said in a Friday note.
"We recommend NVDA as a pure-play in accelerated computing that is in the early stages of evolution as AI-based applications broaden from the cloud to the edge and beyond," the analyst said.
Needham Bullish On Nvidia
As Nvidia further integrates Mellanox, its positioning with enterprise data center customers will improve, as it will be able to provide a complete cloud offering consisting of HPC and networking hardware and software, Gill said in a Friday note.
The analyst said he remains bullish on NVDA's positioning in data center, both in training and inference, coupled with its continued dominance in gaming.
NVDA Price Action
At last check, Nvidia shares were adding 2.24% to $358.88 and have gained about 50% year-to-date.
Related Link: Nvidia Analyst Says New, Ampere-Based Data Center GPU Makes Chipmaker 'Unassailable'
Photo courtesy of Nvidia.
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