Chip maker Nvidia is upgraded to Outperform by Oppenheimer analyst
Oppenheimer is upgrading the chipmaker Nvidia (NASDAQ:NVDA) to Outperform from Perform in the wake of its fiscal second-quarter results this week.
The chipmaker zipped past Wall Street’s estimate for its fiscal second quarter earnings, but fell short on its revenue guidance by providing lackluster forecasts.
While the company reported earnings on an adjusted basis of US$1.76 per share on revenue of US$3.12bn, its revenue forecast for the fiscal third quarter of US$3.25bn falls below Wall Street’s projection of US$3.34bn for the period.
Oppenheimer’s Rick Schafer remains bullish on the company, which saw its shares slip by 4.2% in Friday’s morning session, as all of its business segments grew year over year in its fiscal second quarter, led by its core gaming and data center units.
Schafer downplayed the expected miss on the chipmaker’s revenue for the fiscal third quarter. “We attribute modest [fiscal third-quarter] top-line miss to slowdown in cryptomining demand and lack of volume availability of Nvidia’s recently introduced Turing gaming graphics processing unit,” he wrote in a note to investors.
Schafer expects to see “significant pent-up demand” for Nvidia’s new Turing architecture. He suggest that any near-term weakness in Nvidia’s share price on sluggish revenue guidance presents a buying opportunity and is sticking to a US$310 price target on the stock.
“With three solid, structural growth drivers in [data center artificial intelligence], gaming and autonomous machines, we see continued outsized growth,” he concludes. “We’re buyers with a US$310 target.”
Story by ProactiveInvestors
Source: http://www.proactiveinvestors.com/companies/news/203165/chip-maker-nvidia-is-upgraded-to-outperform-by-oppenheimer-analyst-203165.html
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