NVIDIA (NVDA): Good Enough To Keep The Stock Moving - Nomura
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Nomura Securities analyst, Romit Shah, reiterated his Buy rating on shares of NVIDIA (NASDAQ: NVDA) after the company reported another strong quarter and guide that was materially higher than his estimates and consensus. The analyst believes shares will continue to trade at a substantial premium as revisions move higher.
Nvidia indicated that roughly one-third of the gaming installed-base is still on Maxwell, with the rest on older GPUs. The analyst believes that Pascal-based GPUs should incentivize the base to refresh, creating double digit revenue growth in the gaming segment in CY16 (+20%) and CY17 (+14%).
Nvidia also noted that "deep learning" is seeing a sharp increase in revenues and engagement. Management indicated that roughly half of datacenter revenues come from deep learning, one-third from HPC and rest in virtualization. The analyst believes that the launch of Tesla P100 should continue to drive growth in datacenter, which should grow +95% in CY16 and +50% in CY17.
The price target of $62.50 is up from $55.00.
Shares of NVIDIA closed at $59.70 yesterday.
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