Nvidia's Higher Gaming GPU Prices Raises Analyst Conviction. However, Some Remain Concerned Over Demand And China Ban

Nvidia Corp's NVDA investor day announcement launched the new gaming lineup, the RTX 40 series, based on the new Ada Lovelace architecture. It also focused on offerings demonstrating Nvidia's expansion beyond the data center, including the growing adoption of its software platform Omniverse.

BMO Capital analyst Ambrish Srivastava cut the price target on Nvidia to $210 from $230 but kept an Outperform. At a high level, Srivastava thought Nvidia's Fall event was a lot more packed than expected.

He lowered estimates to reflect China's lost opportunity, assuming the recent Commerce Department ban on sales of certain products to China is "irreversible."

Morgan Stanley analyst Joseph Moore maintained an Equal-Weight rating and $182 price target on Nvidia. Moore said his "biggest takeaway" was the higher prices of gaming GPUs, which increases his conviction about the pace of gaming revenue recovery next year. 

Prices that are 28% higher than the baseline price from two years ago for the higher volume 4080 should drive material growth in revenue, said Moore, who sees revenues in the gaming segment rebounding from the current quarter run rate of $5.5 billion or so to $9.5 billion next year. 

Barclays analyst Blayne Curtis had an Overweight and $190 price target. GTC always tells a powerful AI story, but little was new in announcements, as the Ada Lovelace GPUs was well anticipated.

The more significant issue with the stock remains GPU inventory clearing and overall Data Center demand, he added. 

KeyBanc analyst Joh Vinh reiterated Overweight and recommended investors own NVDA. Vinh's key takeaways from the event include next-generation RTX 40 gaming GPUs, Omniverse and progress on growing recurring revenues, Hopper H100 in total production and ramp over the next few quarters, rearchitecting its next-generation auto platform Atlan, and Orin's automotive design wins. 

Citi analyst Atif Malik found the lack of China restrictions on new gaming products a relief.

Price Action: NVDA shares traded higher by 2.08% at $134.50 on the last check Wednesday.

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