Wells Fargo analyst Aaron Rakers maintained NVIDIA Corp (NASDAQ:NVDA) with an Overweight and lowered the price target from $370 to $250 (58% upside).
The Overweight rating factored in Rakers' positive stance on NVIDIA's competitive positioning in gaming GPUs and expanding growth opportunities in the data center (GPUs and the potential leverage of acquiring Arm), HPC, and emerging/expanding AI opportunities (autonomous vehicles, healthcare, robotics).
Rakers saw sustainability in Nvidia's CUDA software platform differentiation and its continually deepening system software capabilities.
With declines in distribution pricing seen in Nvidia's RTX GPUs and the weakening derivative Taiwanese data points, shares of NVDA have digested an anticipated softening in their Gaming segment.
Rakers continue to believe a premium multiple for Nvidia given a multiyear strong competitive positioning for data center growth driven by cloud and AI, gaming, next-generation autonomous vehicle applications, and an expanding ecosystem of products/applications (e.g., Omniverse).
Rosenblatt analyst Hans Mosesmann expects Nvidia to beat and raise next week amid continued data center momentum, high-end gaming, and automotive.
The current sluggish Chromebook/low-end notebook demand is not related to high-end models that use discrete GPUs where seasonal patterns emerge as supply improves, Mosesmann believed.
Mosesmann did not see crypto having the same impact as feared on Advanced Micro Devices, Inc's (NASDAQ:AMD) print, demonstrated and due to Nvidia's own CMP and RTX crypto compute limiters.
Mosesmann increasingly views the next generation "Hopper" GPU compute ramp late in calendar 2022 as one of the most critical GPU launches over the last generation, with significant adoption and ASP lift in coming years.
Mosesmann saw the July quarter aided by solid data center sales, strength in AI and cloud computing verticals, increased ray tracing adoption, and continued momentum in the Automotive segment.
Nvidia remains one of Mosesmann's favorite secular semiconductor plays, and it reiterated a Buy rating and price target of $400 (153% upside).
Price Action: NVDA shares traded lower by 6.45% at $160.19 on the last check Friday.
