Jefferies Analysts Are Buyers Of NVIDIA Amid Sales Momentum, Probability Of Upside

Noting that NVIDIA Corporation’s NVDA products exhibit momentum, Jefferies’ Mark Lipacis expressed optimism regarding more upside surprises over the next six to eighteen months. The analyst maintained a Buy rating on the company, while raising the price target from $56 to $69. The stock continues to be “a top pick” at Jefferies.

Analyst Mark Lipacis expects NVIDIA to achieve the July-quarter expectation of 4 percent sequential growth. He added, however, that the expectations for the October and January quarters, of 7 percent and 2 percent growth, appears conservative, given the launch of the company’s new 16nm GPU platform Pascal and initial ramp of its high-margin Virtual Reality products.

16nm Pascal

NVDA launched two high-end graphics cards - GTX 1080 and 1070 - for the gaming market in the July quarter. “Pascal marks NVDA's first mfct-node change in 4 years…We expect Pascal will translate to increased visibility if not upside surprises in 2H16/1H17,” Lipacis wrote.

Better PC Commentary

Both Intel Corporation INTC and Advanced Micro Devices, Inc. AMD indicated better-than-expected PC strength in the July quarter.

Datacenter Upside from Deep Learning Applications

“While DL [Deep Learning] is not new, recent improvements in data access, cheap storage & faster GPU processing are finally allowing DL training on a broad scale of applications. We think DL-driven demand for GPUs could result in upside to our estimates over the next 18 months,” the analyst added.

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