Close

Goldman Sachs Sees 27% Upside in NVIDIA (NVDA) and Adds Stock to Conviction Buy List

December 20, 2016 7:03 AM EST
Get Alerts NVDA Hot Sheet
Price: $171.35 +1.25%

Rating Summary:
    33 Buy, 17 Hold, 4 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 10 | Down: 28 | New: 30
Join SI Premium – FREE

Get inside Wall Street with StreetInsider Premium. Claim your 1-week free trial here.

(Updated - December 20, 2016 9:05 AM EST)

Goldman Sachs upgraded NVIDIA (NASDAQ: NVDA) from Buy to Conviction Buy with a price target of $129 (prior $92), implying upside of 27%. 2018 and 19 EPS estimates were increased by 18% and 33% to $3.41/$5.14 from $2.88/$3.86. Analyst Toshiya Hari noted that the company was levered to secular growth.

"We continue to view NVDA as a unique growth story in semis, levered to positive secular trends in gaming, VR (virtual reality), AI (artificial intelligence)/ML (machine learning) and automotive. Note our revised FY18/19 EPS estimates are 26%/57% above the Street, respectively, and we expect estimate revisions to serve as a positive catalyst for the stock in the coming quarters," said Hari.

The analyst added, "We update our assumptions for Nvidia’s data center business given our view that 1) AI/ML capacity additions will drive TAM expansion; 2) Nvidia continues to leverage its position to gain greater share of the ML hardware TAM; and 3) competition continues to face high barriers to entry with new entrants not expected until the mid-2017/2018 timeframe. We remain confident in the growth trajectory of Nvidia’s data center business, with our revenue estimates moving up 35%/53% for FY18/19 and we now expect data center segment revenue to grow 99%/53% in FY18/19 vs 50%/34% prior. We are also taking a more positive long-term view on the overall gaming market, as we expect growth of the gaming population and product refresh to drive revenue in addition to VR. As a result, we now model overall Gaming segment revenue +20%/+28% yoy in FY18/19 vs +16%/+20% prior."

For an analyst ratings summary and ratings history on NVIDIA click here. For more ratings news on NVIDIA click here.

Shares of NVIDIA closed at $101.63 yesterday.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

Analyst Comments, Analyst EPS Change, Analyst EPS View, Analyst PT Change, Hot Comments, Hot Upgrades, Upgrades

Related Entities

Goldman Sachs Conviction Buy List, Goldman Sachs