Shares of Nvidia Corp. (NASDAQ: NVDA) slipped in morning trading on Thursday even as Bank of America analyst Vivek Arya maintained a Buy rating on the stock citing “strong share gains” in the GPU market.
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The analyst cited the most recent monthly survey of deployed GPUs and CPUs used by Steam PC gamers which indicated that Nvidia’s market share increased roughly 700 basis points month-over-month to 82.6% while Intel’s (INTC) share was up roughly 800 basis points month-over-month.
However, Arya cautioned that this data could be skewed by a sharp rise in participants using Simplified Chinese as their operating system language. The analyst stated, “While still generally positive for NVDA, we note overcounting of customers at Asian cyber cafes inflated NVDA share results in prior periods as well (2017/18, potentially late 2020).”
Drawing a comparison between Nvidia’s and AMD’s (AMD) graphic cards, the analyst pointed out that while Nvidia’s top graphics cards, the RTX 30 and 40 series were on sale at a “modest” 7% to 8% premiums at third-party e-commerce retailers, AMD’s legacy graphic cards are selling at discounts in the range of 10% to 40%.
Arya is of the opinion that the gaming market is “on the mend” and advances in artificial intelligence and the data center could benefit the two companies.
Besides Arya, other analysts are cautiously optimistic about NVDA stock with a Moderate Buy consensus rating based on 27 Buys, seven Holds, and two Sells.
