Wells Fargo Sees NVIDIA (NVDA) Printing 90% Gaming Growth on Correlation with Graphics Card Manufacturers
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Wells Fargo analyst Aaron Rakers reiterated a Buy rating and $625.00 price target on NVIDIA (NASDAQ: NVDA) noting he would be a buyer ahead of quarterly results on 2/24. The strong January sales results from two of the largest graphics card manufacturers, MSI and Gigabyte combined, amount to a 68% y/y and +43% m/m compared to the 5 yr average of +22% m/m. The
The analyst stated "The historical correlation (R2 = 0.73) between MSI + Gigabyte revenue vs. comparable quarterly NVIDIA gaming revenue implies NVIDIA’s F4Q21 gaming revenue at $2.8B,or +90% y/y." He went on to state "Current Steam data shows that NVIDIA GeForce GTX GPUs account for ~80% of NVIDIA's total active gaming GPU installed base. With an expanding catalog of next-gen games supporting ray tracing,and thus the need for performance upgrades, we continue to expect that NVIDIA'sgaming GPU product cycle momentum will remain strong through 1H2021".
Shares of NVIDIA closed at $595.00 yesterday.
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