NVIDIA (NVDA) Stock Could Nearly Double, Here's How - Barron's
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Price: $207.60 -2.31%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 0.5%
Revenue Growth %: +96.4%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 0.5%
Revenue Growth %: +96.4%
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NVIDIA (Nasdaq: NVDA) shares are trading stronger this morning, following a positive mention in Barron's over the weekend.
The Santa Clara, CA-based company produces chips utilized in the processing of graphics, something that Barron's points out may be more important than a computers CPU at times.
Growth could continue for the leader in graphics processing for two reasons. One, new devices are relying more on images for user interaction, and can help speed up computer performance as many chips are designed to run in parallel with CPUs, allowing many different calculations to be carried out simultaneously.
And shares could rise another 80%, according to Barron's.
One key point in Intel's (Nasdaq: INTC) settling with NVIDIA, signaling that the chip giant needs NVIDIA's expertise and technology for integration of graphics capabilities with its CPUs.
NVIDIA accounts for about 70% of the graphics chips market, and their GPUs, or graphics processing units, are availabe on Apple's (Nasdaq: AAPL) Mac offerings as well as other PC maker's wares.
NVIDIA is soon to become a leader in the emerging cloud-computing environment, where they have recently partnered with ARM Holdings (Nasdaq: ARMH). For example, their Tegra, a GPU integrated with an ARM CPU, is making waves in the mobile computing industry. The unit appears in about 80% of all new tablet. CEO Jen-Hsun Huang estimates that the unit will amount to 50% of this revs over the next several months and years.
Barron's estimates that Tegra could be in as many as 15 million smartphones by FY12, about 3% of the total market. One analyst estimates that for every 3% market share jump, about $0.20 is added to EPS annually.
Shares are also cheap, trading at about 19x FY11 EPS estimates, compared to historical levels in the mid-20s. Should NVIDIA increase their multiple, the stock could trade at or near $40, a 72% gain to today's price of $23.27.
Shares of NVDA are up 4.3% premarket today.
The Santa Clara, CA-based company produces chips utilized in the processing of graphics, something that Barron's points out may be more important than a computers CPU at times.
Growth could continue for the leader in graphics processing for two reasons. One, new devices are relying more on images for user interaction, and can help speed up computer performance as many chips are designed to run in parallel with CPUs, allowing many different calculations to be carried out simultaneously.
And shares could rise another 80%, according to Barron's.
One key point in Intel's (Nasdaq: INTC) settling with NVIDIA, signaling that the chip giant needs NVIDIA's expertise and technology for integration of graphics capabilities with its CPUs.
NVIDIA accounts for about 70% of the graphics chips market, and their GPUs, or graphics processing units, are availabe on Apple's (Nasdaq: AAPL) Mac offerings as well as other PC maker's wares.
NVIDIA is soon to become a leader in the emerging cloud-computing environment, where they have recently partnered with ARM Holdings (Nasdaq: ARMH). For example, their Tegra, a GPU integrated with an ARM CPU, is making waves in the mobile computing industry. The unit appears in about 80% of all new tablet. CEO Jen-Hsun Huang estimates that the unit will amount to 50% of this revs over the next several months and years.
Barron's estimates that Tegra could be in as many as 15 million smartphones by FY12, about 3% of the total market. One analyst estimates that for every 3% market share jump, about $0.20 is added to EPS annually.
Shares are also cheap, trading at about 19x FY11 EPS estimates, compared to historical levels in the mid-20s. Should NVIDIA increase their multiple, the stock could trade at or near $40, a 72% gain to today's price of $23.27.
Shares of NVDA are up 4.3% premarket today.
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