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Bank Of America's Key Takeaways From Nvidia's Investor Day

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Bank Of America's Key Takeaways From Nvidia's Investor Day
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NVIDIA Corporation (NASDAQ: NVDA)'s investor day presentation Tuesday was followed by a nearly 8-percent decline in the stock, but reaffirmed the bull case for the company, according to Bank of America Merrill Lynch. 

The Analyst

Bank of America's Vivek Arya maintains a Buy rating on Nvidia's stock with an unchanged $300 price target.

The Thesis

Nvidia's analyst day attracted 8,500 attendees a fourfold increase from five years ago, Arya said in a Wednesday note. (See the analyst's track record here.)

The company's presentation focused on three areas, Arya said: data center, gaming and autonomous driving. Here are some of the analyst's takeaways on each of the three business segments.

Data Center

  • Nvidia's total addressable market opportunity was estimated to be $50 billion versus $30 billion last year.
  • The company boasts multiple structural advantages and differentiated products, including the new DGX-2 supercomputer-in-a-box.

Gaming

  • Nvidia's gaming sales growth through 2020 should come at an annual rate of 19 percent.
  • Only 30 percent of the installed base has upgraded to Pascal, which implies "significant runway" for user upgrades.

Autonomous Driving

  • Management believes autonomous vehicles represent a $60-billion TAM by 2035.
  • Nvidia's car opportunity is "incremental to its infotainment business."
  • The company's products are powerful enough to address future needs, including collecting data, training models, and conducting simulations.

Price Action

Shares of Nvidia were trading lower by more than 2 percent at the time of publication Wednesday.

Related Links:

What To Expect From Nvidia's Analyst Day

Nvidia To Halt AV Fleet Testing As Uber Investigates Fatal Crash

Photo courtesy of Nvidia. 

Latest Ratings for NVDA

DateFirmActionFromTo
Jun 2018FBN SecuritiesInitiates Coverage OnOutperform
Jun 2018BenchmarkInitiates Coverage OnBuy
May 2018Cowen & Co.Initiates Coverage OnOutperform

View More Analyst Ratings for NVDA
View the Latest Analyst Ratings

Posted-In: Autonomous Driving Bank of America Data Center gamingAnalyst Color Price Target Reiteration Analyst Ratings Best of Benzinga

 

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