Market Overview

For Nvidia, Gaming Trends Could Make 2018 Another Standout Year

For Nvidia, Gaming Trends Could Make 2018 Another Standout Year

NVIDIA Corporation (NASDAQ: NVDA), one of the hottest stocks of both 2016 and 2017, is showing no signs of slowing down heading into 2018 — which could prove to be a busy year for the gaming and emerging cryptocurrency markets, according to Bank of America.

The Analyst

Bank of America's Vivek Arya maintains a Buy rating on Nvidia's stock with an unchanged $210 price target.

The Thesis

The ongoing trends in the $9.7 billion graphics industry should be viewed as "mostly positive" for Nvidia, Arya said in a research report. (See Arya's track record here.) 

Four of the trends identified by Arya are: 

  • Easier comps in 2018 after tougher PC gaming comps throughout 2017. 
  • Expectations for a 8 percent compounded annual growth rate in units sold and an average selling price CAGR of 9 percent. 
  • A model which assumes declining spend from crypto miners from 2017's $909 million so any stability would represent upside to the model.
  • Expectations for a 38-percent increase in Nintendo Switch consoles shipped in 2018.

An analysis of data from the online gaming community Steam implies a "large upgrade opportunity" for Nvidia next year, the analyst said.

October data shows Nvidia holds a leadership position of at least 80 percent, with the 2017 Pascal generation representing 35 percent adoption among gamers, Arya said. The analyst's survey of top-selling graphics cards also found Nvidia holds 26 of the top 30 slots.

Price Action

Shares of Nvidia were trading higher by around 0.8 percent at the time of publication. 

Related Links:

There Could Be 18% Upside Left In Nvidia, Analyst Says

AMD Has More To Lose Than Nvidia Should Bitcoin Mining Hardware Sales Decline

Photo courtesy of Nvidia. 

Latest Ratings for NVDA

Jan 2021Truist SecuritiesMaintainsBuy
Jan 2021SusquehannaMaintainsPositive
Nov 2020B of A SecuritiesMaintainsBuy

View More Analyst Ratings for NVDA
View the Latest Analyst Ratings


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