Bank Of America Adds Nvidia To Top Stock List After Latest Gaming Checks

NVIDIA Corporation NVDA stock has tumbled 5.1 percent in the past five days after the company announced it has put its autonomous vehicle program on hold. A pair of new reports from Bank of America, however, suggest the firm is as bullish as ever on Nvidia.

The Analyst

Bank of America analyst Vivek Arya reiterated his Buy rating and $300 price target for Nvidia and  added the stock to the firm’s US1 list of top American stock picks.

The Thesis

Nvidia is the top stock pick in the semiconductor/technology sector, according to Arya.

“It’s one of the more unique investments in semis/technology, levered to multiple 10x growth markets in artificial intelligence (AI), gaming, virtual reality and autonomous cars (AV),” Arya said.

After making such a huge run in recent years, Arya said it’s not surprising to see some profit taking as investors reduce their exposure to growth stocks, but Nvidia remains well-positioned for the long term.

Arya also released a report on Bank of America’s latest gaming GPU numbers from Steam. Gaming GPUs currently account for roughly 74 percent of the total GPU market, with cryptocurrency accounting for 16 percent and PCs accounting for 10 percent.

Arya reported that GPU supply appears to be increasing after long periods of shortages in the market due to cryptocurrency demand.

Nvidia’s Pascal chips have a 46 percent penetration rate among Steam users, surpassing the 44 percent peak rate of the previous-generation Maxwell cards. Seventy-four percent of Steam gamers are using Nvidia cards, while only 6 percent use Advanced Micro Devices AMD cards.

Price Action

Nvidia stock traded higher by 2 percent on Tuesday morning, while AMD shares were higher by 1.2 percent.

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