tiprankstipranks
Nvidia to Further Cement Its Industry Leader Status, Says 5-Star Analyst
Stock Analysis & Ideas

Nvidia to Further Cement Its Industry Leader Status, Says 5-Star Analyst

In what appears like a rare misstep in the company’s flawlessly executed 2020, Nvidia (NVDA) botched up last week’s launch of the GeForce RTX 3080 graphics cards. On Monday, Nvidia issued an apology after it was unable to meet demand for the new product, leaving hordes of disappointed fans unable to get their hands on Nvidia’s latest GPU.

Whilst no doubt a letdown for Nvidia’s global fanbase, the thirst for the new offering is another indicator why Nvidia is one of 2020’s most successful players. From data center to gaming to AI and autonomous vehicle tech, the demand has pushed Nvidia’s share price to new heights with the stock up by a massive 106% since the turn of the year. But after last week’s debacle and 2020’s mighty run up, is there a pullback on the horizon?

Not according to Tigress analyst Ivan Feinseth. The 5-star analyst sees plenty of reasons why Nvidia’s forward momentum is set to continue.

Feinseth reiterated a Buy rating on NVDA shares, noting “strong business trends in Data Center and gaming demand combined with a new product introduction cycle continue to drive growth and profitability, which, along with the recently announced acquisition of ARM Holdings, further advances its industry leadership position.” (To watch Feinseth’s track record, click here)

The recently announced purchase of UK-based chip designer ARM has raised the prospect of heavy regulatory scrutiny while questioning whether the deal will lead to share dilution. Feinseth, however, focuses on the opportunities the deal can provide.

“ARM counts almost every major semiconductor manufacturer and IT infrastructure platform service provider as its client,” Feinseth notes, “Synergies from the ARM integration will not only drive further innovation but operating efficiencies as well.”

The purchase will provide Nvidia with a more prominent position in the rapidly expanding mobile gaming market in which mobile handsets “continue to ramp up gaming and multimedia-based functionality.”

Gaming has always been Nvidia’s bread and butter, its GPUs powering hungry gaming needs although the rise of Nvidia’s datacenter segment has seen it incrementally close the gap on the company’s largest revenue generator. The recent release of the A100, the first data center GPU based on the company’s Ampere architecture is considered an industry game changer.

“The new A100s are 20X faster than its predecessor GPUs and enable a broad range of compute-sensitive applications, including AI training and inference, data analytics, genomics, edge video analytics, and 5G high-speed connectivity,” Feinseth noted.

There are many other reasons to back Nvidia, including its tilt toward autonomous vehicle technology through a partnership with Mercedes Benz, the acquisition of data specialist Mellanox, and finally, Nvidia’s strong balance sheet and cash flow which “enables it to fund ongoing innovation and strategic acquisitions.”

There’s not much pushback from the analyst community on Feinseth’s assessment. The analyst consensus rates Nvidia a Strong Buy, based on 25 Buys, 4 Holds and 1 Sell. At $559.28, the average price target represents possible upside of 15% over the next 12 months. (See Nvidia stock-price forecast on TipRanks)

To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

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.

Trending

Name
Price
Price Change
S&P 500
Dow Jones
Nasdaq 100
Bitcoin

Popular Articles