- Piper Sandler analyst Harsh Kumar reiterated an Overweight rating and $350 price target on NVIDIA Corp (NASDAQ:NVDA).
- Nvidia could be a big winner this earnings season, with profits driven by solid performance in the chip maker's gaming and data center businesses, Kumar said.
- "We are looking for a significant beat and raise when the company reports earnings on Wednesday after market close, as both gaming and data center continue to perform well," Kumar added.
- He said a new upgrade cycle in GPUs could drive growth in gaming.
- Kumar projects a 4.3% quarter-over-quarter increase for the January quarter, which the company could beat, he added.
- Although demand for gaming remains strong and will continue to grow over the next few quarters, Kumar believes Nvidia's data center business will drive revenue this quarter.
- The analyst sees data center trends accelerating in 2022 and predicts 7.5% sequential growth this quarter.
- With trends reaccelerating, he added that the data center business could even reach double-digit growth.
- "We believe the data center business will be responsible for much of the revenue performance, translating to both an EPS and revenue beat," he said.
- Kumar noted Nvidia "is supply-constrained at this point in time," affecting both the gaming and data center business.
- Regardless, he added that the company is better positioned to get supply than competitors.
- He expects the next quarter's guidance to be up sequentially, even if gaming sales have historically been flat during the April quarter.
- On Monday, Truist analysts also expressed an optimistic view of Nvidia's earnings.
- Price Action: NVDA shares traded higher by 9.02% at $264.44 on the last check Tuesday.
