7 Nvidia Analysts Break Down Long-Term Story, New Products, Data Center Growth After Q1 Print

Zinger Key Points
  • Mizuho's Vijay Rakesh dropped the firm's price target but said long-term growth remains in place.
  • "We believe NVDA continues to drive data center and AI leadership," the analyst says.

Several NVIDIA Corporation NVDA reacted to the chipmaker's first-quarter report with lower price targets. Here's what they had to say.

The NVIDIA Analysts: BMO analyst Ambrish Srivastava has an Outperform rating and lowered the price target from $375 to $300.

Wells Fargo analyst Aaron Rakers has an Overweight rating and $250 price target.

Mizuho Securities analyst Vijay Rakesh has a Buy rating and lowered the price target from $345 to $290.

Raymond James analyst Chris Caso has a Strong Buy rating and lowered the price target from $365 to $250.

Needham analyst Rajvindra Gill have a Buy rating and lowered the price target from $400 to $240.

Rosenblatt analyst Hans Mosesmann has a Buy rating and $400 price target.

KeyBanc analyst John Vinh has an Overweight rating and lowered the price target from $310 to $250.

Related Link: How NVIDIA Stock Looks Heading Into Q1 Earnings Print 

The Nvidia Takeaways: Lower guidance and a slowdown for the company’s gaming business led to a lower price target from Srivastava.

“In the 2H, NVIDIA will likely have an architecture shift in gaming, along with what is likely to be continued pressure on the business from inflation, which will likely lead to a far lower than seasonal F3Q,” Srivastava said.

Several business lines including gaming and datacenters are seeing the impact of supply issues, lockdowns in China and the war in Ukraine.

Rakers reiterated a Buy rating and kept the price target in place, noting the company’s datacenter business is showing momentum, along with new products coming in the second half of the fiscal year.

“The company also pointed to normalizing channel inventory levels and alluded to a next-gen product cycle, which we believe could start to have some impact into F3Q23,” Rakers said.

Rakesh dropped the price target but said long-term growth remains in place.

“We believe NVDA continues to drive data center and AI leadership, positioning it well into 2023, and the near-term reset should be good entry point,” Rakesh said.

The analyst points to new launches coming in the second half of the fiscal year being exciting and also contributing to increased inventory counts in the quarter.

Long-term growth is the storyline for Caso, who also cut the price target.

“The reason we’ve considered NVDA as one of the stocks we’re sticking with despite the market pullback is because of not just their long-term secular growth prospects, but also their near-term product cycles in gaming,” Caso said.

New products could help boost the third quarter and ramp up by the end of the calendar year, Gill said.

“We see these applications as the driver of the significant growth, as the company builds products able to serve all workloads,” Gill said.

One item mentioned in the earnings report by NVIDIA was the cryptocurrency market.

“Crypto, always a wildcard was described as a weakening issue going forward if there was an issue much at all in the April quarter,” Mosesmann said.

The analyst sees a “massive multi-product cycle” coming for the company and a long-term story playing out. Mosesmann maintained a $400 price target.

The big stories for Vinh were gaming revenue weakening and data center momentum strengthening.

“Despite the absence of data center sales to Russia, NVDA is confident that data center will continue to grow q/q for the rest of the year,” Vinh said.

NVDA Price Action: Nvidia shares gained 5.16% Thursday, closing at $178.51, according to Benzinga Pro

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Posted In: Analyst ColorEarningsNewsPrice TargetReiterationAnalyst RatingsMoversTrading IdeasAaron RakersAmbrish SrivastavaBMO CapitalChris Casocryptocurrency miningdata centersHans MosesmannJohn VinhKeyBancMizuho SecuritiesNeedhamRajvindra GillRaymond JamesRosenblattVideo Game StocksVijay RakeshWells Fargo
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