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

Noting that NVIDIA Corporation’s (NASDAQ: 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 (NASDAQ: INTC) and Advanced Micro Devices, Inc. (NASDAQ: 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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