For most of 2021, the global chip shortage has been a thorn in the side of several industries. Supply chain issues are persisting for auto manufacturers, computer makers, and smartphone producers. As many companies in these sectors attempt to mitigate the supply constraints, the actual firms producing the chips are experiencing massive demand, which is expected to continue well into the year. The Nvidia Corporation (NVDA) printed another strong quarter yesterday, and analysts are raising outlooks in kind. (See Nvidia Corporation stock charts on TipRanks)
Rajvindra Gill of Needham & Company reported on Nvidia’s positive future, stating that the semiconductor company’s demand “remains robust,” and that its data center and gaming segments are expected to expand as well.
Gill assigned a Buy rating on the stock, and raised his bullish price target from $200 to $245. This new target represents a possible 12-month 28.68% upside from Wednesday’s closing share price of $190.40.
Nvidia’s gross margins continue to see growth, which gives the company more operating leverage and the ability to act with more flexibility.
The five-star analyst explained that although Nvidia’s acquisition deal with technology firm Arm Ltd. has been delayed and potentially has only a 20% chance of success, other factors appear much brighter. Demand for data centers is experiencing growth due to ongoing trends toward cloud-based AI software, and this sector is bringing in significant revenue.
A strong balance sheet, a valuation with room to grow, and Nvidia’s capacity for artificial intelligence “will be crucial during the COVID-19 outbreak, especially regarding medical research and genomics,” wrote Gill.
On TipRanks, NVDA has an analyst rating consensus of Strong Buy, based on 28 Buy, 1 Hold, and 1 Sell ratings. The average Nvidia Corporation price target is $223.77, suggesting a potential 12-month upside of 17.53%.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
