MKM: It's Time To Buy Nvidia

• NVIDIA Corporation NVDA shares have appreciated 34.65 percent over the past three months, reaching a high of $28.70 on November 2.
• MKM Partners’ Ian Ing has upgraded the rating on the company from Neutral to Buy, with a price target of $36.
• Although the stock is expensive, Ing believes that it is “worth it,” given that the company’s growth trajectory is sustainable and that it has amongst the highest earnings multiples in the semis industry.

Analyst Ian Ing mentioned that NVIDIA reported a $0.20 EPS beat, partly driven by “revenues well above the guided range and $0.09 due to taxes.”

Ing believes that the company’s growth trajectory is sustainable, given NVIDIA’s “positioning to lead in significant paradigm changes favoring more valuable semiconductor solutions,” such as the evolution of autonomous driving, virtual reality, cloud computing and E-sports.

Although the share price is currently the highest in MKM Partners’ coverage universe, Ing believes that it is reasonable in the context of the “very large markets” that the company serves and that its TAM opportunity had “never been greater.”

Ing also sees the competition for NVIDIA as “benign,” given that there is “relatively weaker competition or compromises with alternative solutions” in each of the company’s growth drivers.

In fact, according to the MKM Partners report, the guidance could prove conservative, given that this is a 14-week quarter and although April is usually a seasonally weak quarter, there are various “gaming catalysts” in store.