Nvidia Will Maintain 'Dominant Market Share' Thanks To New Volta Chip

UBS said Thursday that NVIDIA Corporation's NVDA new Volta chip should protect its dominant market share against the Vega chip of rival Advanced Micro Devices, Inc. AMD and raised its target price to $148, up from $135.

Analyst Stephen Chin rates the stock a Buy after analysts met with management.

Nvidia Should Remain Market Leader

“We met with management [Wednesday] and remain comfortable with our Buy thesis that NVIDIA's long-term opportunity selling GPU chips into the data center is large and should remain the market leader,” Chin wrote.

“Some key performance metrics that suggest Nvidia's new Volta GPU chip maintains an advantage include peak performance of 30TFLOPS (FP16) that is 20% faster than AMD's upcoming Vega chip and potentially with better power efficiency as well given a 300W or lower power envelope.”

He said Nvidia could see gross margin upside in the Jan. 18-April 18 quarter if it succeeds in ramping up its Volta GPU chip for data center customers, and Pascal chip sales increase as a percentage of total sales.

“We note Nvidia saw a strong gross margin increase in the Oct-16 and Jan-17 quarters on higher gaming and data center sales and as the Pascal chip volumes became more significant and reaching a neutral impact to margins given costs early in the 16FF process ramp.”

“Maintaining estimates but the machine learning inference market looks large,” Chin wrote. “We keep our FY18 and FY19 EPS estimates unchanged at $3.41 and $4.10.”

Nvidia ended up closing at $133.07, up 4.1 percent.

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Image Credit: By yoggy0 from Yokohama, Japan (SIGGRAPH Asia 2009) [CC BY 2.0], via Wikimedia Commons