Following NVIDIA Corporation NVDA's strong start to F1H17 and its higher-than-consensus 3Q17 guidance, Argus’ Jim Kelleher believes there is room for further share price appreciation.
Kelleher reiterated a Buy rating on the company, while raising the price target from $54 to $72.
2Q Outperformance
NVIDIA reported its 2Q17 results with the revenue and EPS well ahead of the consensus, driven by both the company’s new and traditional businesses.
“The company is seeing rising demand for its “Pascal” generation of GPUs across multiple platforms, from PC gaming to deep learning and other capabilities,” the analyst mentioned, adding, “Building on competencies gained in developing its market leading graphics processing technology, NVidia has created its GPU Accelerated Computing platform.”
Deep Learning Responsible
The company’s CEO, Jen-Hsun Huang, attributed most of the 2Q outperformance to the deep learning segment, in which NVIDIA’s “graphics processing power is harnessed to massive computing tasks,” Kelleher stated.
Data center revenue surged 110 percent year-over-year during the quarter. Given that the company indicated that the high performance computing (HPC) was flat year-over-year, the analyst noted that all of the growth was driven by deep learning.
“The company is devoting significant resources to establishing and expanding leadership in machine learning,” Kelleher pointed out, while adding that another end market that grew more than 50 percent year-over-year was automotive, “where NVidia had a strong presence in existing capabilities as well as a leading position in autonomous driving.”
Full ratings data available on Benzinga Pro.
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Date | ticker | name | Actual EPS | EPS Surprise | Actual Rev | Rev Surprise |
---|
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.