Should NVIDIA Be Trading At A Premium To Its Peers?
Canaccord Genuity’s Matthew D. Ramsay believes NVIDIA Corporation (NASDAQ: NVDA) shares deserve to trade at a premium to the semiconductor group, with upside expected to the near-term consensus forecasts.
Ramsay maintains a Buy rating on the company, while raising the price target from $45 to $55.
Ramsay explained that the valuation premium was warranted given the investments made by management in both developer/tools and hardware technology innovation and the premium-tier installed base that is both expanding and sticky.
“Following the launch of Pascal and in light of the recent strong growth in enterprise and automotive revenue, we maintain our belief NVIDIA’s transformation from a PC-leveraged GPU supplier to a diverse visual-computing company is now complete,” the analyst mentioned.
Ramsay noted that both growth and overall earnings power were now driven by NVIDIA’s four target growth markets of enterprise, gaming, automotive and HPC/cloud, representing more than 90 percent of the non-IPR revenue.
“As applications of highly parallel GPU computing expand and developer tools and deep learning algorithms mature, our positive thesis continues to play out with strong gaming GPU growth expected to continue near term,” the analyst stated.
Ramsay believes the company’s gaming franchise is poised for sustained robust growth in the low-teens, driven by the launch of Pascal, despite.
“Further, we believe automotive growth will remain strong, VR could catalyze further GeForce ASP expansion and professional visualization sales, and deep learning applications should sustain accelerated datacenter GPU growth,” the Canaccord Genuity report added.
Latest Ratings for NVDA
|Sep 2016||SunTrust Robinson Humphrey||Initiates Coverage on||Neutral|
|Sep 2016||Susquehanna||Initiates Coverage on||Neutral|
|Aug 2016||Argus Research||Maintains||Buy|
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