Deutsche Bank Expects In-Line Revenues for NVIDIA Corporation

In a report published Tuesday, Deutsche Bank analyst Ross Seymore reiterated a Hold rating and $17.00 price target on

. In the report, Deutsche Bank noted, “We expect NVIDIA to report F3Q15(Oct) revenue of $1.2b (+9% q/q) in line with guidance and Consensus as we model GPU revenue +7% q/q (78% of sales), supported by Intel's 3Q14 PC Client revenue +6% q/q. We note that recent press reports suggest notebook brands (MSI, Asustek Computer, Lenovo and Acer) have been focusing on gaming NB models which is a positive for discrete GPU unit growth. For NVDA's Tegra segment we estimate Oct qtr revenue +25% q/q (17% of sales) driven by automotive sales, Xiaomi MiPad (Tegra K1) and Chromebook builds (eg. HP Chromebook 14, Acer Chromebook 13). We model gross margin of 55.3% down -80bps q/q (guidance 55.2-55.5%) as higher Tegra mix impacts GM, and opex of $463m noting that opex may be higher on legal expenses related to the complaints filed with the ITC and U.S. District Court in Delaware. We estimate F3Q15 GAAP EPS of $0.28 (Street $0.28) and see potential for NVDA to report a ~$0.01 below DB/Street estimates on higher legal expenses.” NVIDIA Corporation closed on Tuesday at $19.87.