- NVIDIA Corp NVDA and Advanced Micro Devices Inc AMD appear poised to keep growing firmly in gaming, as just 23% of Nvidia gamers have a GPU that is on par with the latest consoles, BofA said.
- BofA analyst Vivek Arya reiterated a Buy rating on Nvidia with a $375 price target (35.8% upside).
- The analyst "heard confidence around momentum" heading into 2022 across gaming, data center, and "nascent omniverse/autos opportunities."
- Capacity remains a bottleneck, with demand outpacing supply throughout 2021, especially in gaming. However, management noted they are working hard on securing supply, and they expect constraints to ease in the second half of 2022.
- The analyst calls Nvidia a "top compute pick" and continues to believe the company is best positioned to "address several of the most important, multi-decade secular growth opportunities."
- "In our view, consumer willingness to buy graphics cards at inflated prices is a signal that NVDA still has plenty of room to grow ASPs even from higher Ampere levels," analyst Vivek Arya noted. He added that Ampere's average selling price of $482 is about 15-75% above prior Turing generations and "well above" the average of other Nvidia products between $200 and $300.
- Comparatively, AMD "Big Navi" products sell between $299 and $399, well above previous AMD products that retailed for $150 to $200.
- "We reiterate Buy ratings on NVDA and AMD on strong and nascent gaming cycles, with new products and further ASP tailwinds," Arya wrote in the note.
- Price Action: NVDA shares traded higher by 2.3% at $282.32 on the last check Thursday.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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