NVIDIA (NASDAQ:NVDA) Upgraded by Cascend Securities to Buy

NVIDIA (NASDAQ:NVDA) was upgraded by research analysts at Cascend Securities from a “hold” rating to a “buy” rating in a research report issued to …

NVIDIA logoNVIDIA (NASDAQ:NVDA) was upgraded by research analysts at Cascend Securities from a “hold” rating to a “buy” rating in a research report issued to clients and investors on Thursday, Briefing.com Automated Import reports. The brokerage presently has a $190.00 price objective on the computer hardware maker’s stock. Cascend Securities’ price objective suggests a potential upside of 13.70% from the company’s previous close.

Other equities analysts also recently issued reports about the company. UBS Group set a $25.00 price target on Macy’s and gave the stock a “hold” rating in a research note on Friday, May 17th. Barclays reaffirmed a “hold” rating and issued a $23.00 target price on shares of Cypress Semiconductor in a report on Thursday, June 6th. Morgan Stanley set a $20.00 target price on C&J Energy Services and gave the stock a “hold” rating in a report on Monday, May 13th. Royal Bank of Canada raised their target price on NVIDIA to $200.00 and gave the stock an “outperform” rating in a report on Monday, May 13th. Finally, Summit Redstone cut NVIDIA to a “hold” rating in a report on Friday, May 17th. Four analysts have rated the stock with a sell rating, fourteen have issued a hold rating and twenty-six have assigned a buy rating to the company. The company has a consensus rating of “Buy” and an average price target of $194.34.

Shares of NVDA stock traded up $7.04 on Thursday, reaching $167.10. The stock had a trading volume of 10,557,086 shares, compared to its average volume of 13,764,986. The firm has a market cap of $97.58 billion, a PE ratio of 27.53, a P/E/G ratio of 4.05 and a beta of 2.09. NVIDIA has a 1 year low of $124.46 and a 1 year high of $292.76. The company has a debt-to-equity ratio of 0.25, a quick ratio of 7.78 and a current ratio of 8.98. The stock’s 50 day simple moving average is $150.59.

NVIDIA (NASDAQ:NVDA) last released its quarterly earnings results on Thursday, May 16th. The computer hardware maker reported $0.88 earnings per share (EPS) for the quarter, topping the Zacks’ consensus estimate of $0.81 by $0.07. The firm had revenue of $2.22 billion for the quarter, compared to the consensus estimate of $2.20 billion. NVIDIA had a return on equity of 31.27% and a net margin of 30.68%. The company’s revenue for the quarter was down 30.8% on a year-over-year basis. During the same period last year, the business posted $2.05 EPS. As a group, sell-side analysts predict that NVIDIA will post 4.22 EPS for the current year.

In other news, Director Harvey C. Jones sold 100,000 shares of NVIDIA stock in a transaction dated Monday, June 17th. The stock was sold at an average price of $145.10, for a total value of $14,510,000.00. Following the sale, the director now directly owns 32,983 shares of the company’s stock, valued at $4,785,833.30. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CFO Colette Kress sold 2,236 shares of NVIDIA stock in a transaction dated Friday, June 28th. The stock was sold at an average price of $164.01, for a total value of $366,726.36. Following the completion of the sale, the chief financial officer now directly owns 239,710 shares in the company, valued at $39,314,837.10. The disclosure for this sale can be found here. Insiders own 4.64% of the company’s stock.

Several hedge funds have recently modified their holdings of NVDA. Norges Bank bought a new stake in shares of NVIDIA in the fourth quarter worth about $737,230,000. SG Americas Securities LLC increased its holdings in shares of NVIDIA by 104.7% in the first quarter. SG Americas Securities LLC now owns 128,201 shares of the computer hardware maker’s stock worth $23,020,000 after purchasing an additional 2,866,055 shares during the last quarter. Assenagon Asset Management S.A. bought a new stake in shares of NVIDIA in the first quarter worth about $191,981,000. Baillie Gifford & Co. increased its holdings in shares of NVIDIA by 16.0% in the first quarter. Baillie Gifford & Co. now owns 7,647,342 shares of the computer hardware maker’s stock worth $1,373,156,000 after purchasing an additional 1,052,689 shares during the last quarter. Finally, FMR LLC increased its holdings in shares of NVIDIA by 1.8% in the first quarter. FMR LLC now owns 49,860,097 shares of the computer hardware maker’s stock worth $8,952,880,000 after purchasing an additional 858,116 shares during the last quarter. 67.51% of the stock is currently owned by hedge funds and other institutional investors.

About NVIDIA

NVIDIA Corp. engages in the design and manufacture of computer graphics processors, chipsets, and related multimedia software. It operates through the Graphics Processing Unit (GPU) and Tegra Processor segments. The GPU segment comprises of product brands which aims specialized markets including GeForce for gamers; Quadro for designers; Tesla and DGX for AI data scientists and big data researchers; and GRID for cloud-based visual computing users.

Further Reading: What are different types of coverage ratios?

Analyst Recommendations for NVIDIA (NASDAQ:NVDA)

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Boutique Research Firm Upgrades Nvidia, Says AI, Ray Tracing Will Drive Demand For Chipmaker

After several years of major market outperformance, semiconductor giant NVIDIA Corporation (NASDAQ: NVDA) has traded mostly in-line with the …

After several years of major market outperformance, semiconductor giant NVIDIA Corporation (NASDAQ: NVDA) has traded mostly in-line with the market so far in 2019.

On Thursday, one analyst said investors can expect Nvidia to make another run higher in the near future.

The Analyst

Cascend analyst Eric Ross upgraded Nvidia from Hold to Buy with a $190 price target.

The Thesis

Nvidia’s inference technology coupled with artificial intelligence spending by cloud providers will create a perfect storm of demand for the chipmaker, Ross said in a Thursday upgrade note. (See his track record here.)

Unfortunately, hese trends will likely not have a significant impact on Nvidia’s revenue numbers until the fourth quarter of 2019, Ross said — but added that investors can expect better visibility and positive commentary from management in the next two quarters.

The new Radeon 5700 and 5700 XT GPU releases from Advanced Micro Devices, Inc. (NASDAQ: AMD) will likely eat into Nvidia’s gaming GPU sales, the analyst said.

Despite the near-term headwinds, Ross said Nvidia’s gaming business should get a huge boost from ray tracing in the years ahead.

“Ray tracing may not matter much now (as few games support it), but when the leading games use it it will all of a sudden become important.”

Nvidia is at least one generation ahead of AMD in ray tracing tech, Ross said.

In the AI space, the analyst said CUDA is the gold standard among engineers — and AMD doesn’t have an answer.

Cascend had been bearish on Nvidia since May 2018 due to concerns over a breakdown in cryptocurrency mining demand. Now that the crypto bubble has burst, Ross said investors have a chance to safely enter one of the best growth stories in the hyperscale data center space.

Price Action

Nvidia shares were trading higher by 3.78% at $166.07 at the time of publication Thursday.

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Photo courtesy of Nvidia.

Latest Ratings for NVDA

Date Firm Action From To
Jul 2019 Upgrades Hold Buy
Jun 2019 Initiates Coverage On Outperform
Jun 2019 Maintains Overweight

View More Analyst Ratings for NVDA

View the Latest Analyst Ratings

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3 Reasons to Buy Nvidia Stock

Nvidia’s (NASDAQ:NVDA) release of the “Super” version of the GeForce RTX cards is a defensive move. With Advanced Micro Devices …

Nvidia’s (NASDAQ:NVDA) release of the “Super” version of the GeForce RTX cards is a defensive move. With Advanced Micro Devices (NASDAQ:AMD) also releasing the Radeon XT-series card this month, Nvidia needs to stay ahead. Though it is not a game-changing refresh based on the Turing architecture, it will still contribute to the revenue re-acceleration of NVDA’s graphics division.

Markets are cautious that Nvidia’s latest graphics processing unit (GPU) refresh will re-accelerate sales. But this time seems promising because these cards are solid performers that consumers are willing to buy.

Upon its release, read Nvidia GPU reviews from tech sites. If the experts choose Nvidia’s Super GPU cards over AMD’s, then the rebound in Nvidia stock may hold this time around.

Here are three reasons to buy Nvidia stock.

1) GeForce RTX SUPER Series Launch

Nvidia Stock GeForce RTX SUPER Series LaunchNvidia Stock GeForce RTX SUPER Series Launch

Source: Shutterstock

The GeForce RTX Super announcement potentially caught AMD off guard.

Nvidia announced on July 2 that it will introduce three “Super” versions of the GeForce RTX. The models are the GeForce® RTX 2060 SUPER™, GeForce RTX 2070 SUPER and GeForce RTX 2080 SUPER. They are priced at $399, $499, and $699, respectively. These are the specifications Nvidia provided:

  • GeForce RTX 2060 SUPER GPU – Starting at $399, Available July 9

    º Up to 22% faster (average 15%) than RTX 2060

    º 8GB GDDR6 – 2GB more than the RTX 2060

    º Faster than GTX 1080

    º 7+7 TOPs (FP32+INT32) and 57 Tensor TFLOPs
  • GeForce RTX 2070 SUPER GPU – Starting at $499, Available July 9

    º Up to 24% faster (average 16%) than RTX 2070

    º Faster than GTX 1080 Ti

    º 9+9 TOPs (FP32+INT32) and 73 Tensor TFLOPs
  • GeForce RTX 2080 SUPER GPU – Starting at $699, Available July 23

    º Memory speed cranked up to 15.5Gbps

    º Faster than TITAN Xp

    º 11+11 TOPs (FP32+INT32) and 89 Tensor TFLOPs

Similarly, AMD will launch the Radeon RX 5700 XT GPU this month at a cost of $449, while the 5700 is set to be priced at $379. AMD’s less expensive cards could put some pressure on Nvidia.

Gamers could choose cost savings in return for cards that under-perform the equivalent Nvidia cards. If there are more casual gamers than enthusiasts, AMD could take market share and hurt Nvidia’s profit margin. Conversely, Nvidia may offer better performance relative to price, which would help drive GPU sales higher. The profit margin will increase, especially after Nvidia worked down its inventory of the older generation of cards.

Nvidia’s Super GPUs

Early reviews of the 2060 Super suggest that the card is on par with the original RTX 2070. And the 2070 Super is only 5%-to-9% slower than the original RTX 2080. More impressive is that the RTX 2070 Super gives 1080 Ti-level performance for just $500. Nvidia effectively nullified any reasons for consumers to buy an AMD Vega or Radeon VII with this $500 card.

Nvidia’s pre-emptive strike against AMD’s GPU launch is a brilliant move. AMD is already taking market share from Intel (NASDAQ:INTC) in the CPU space but continues to struggle when going head-to-head against Nvidia.

2) Manageable Risks Ahead for NVDA Stock

Activision sales slow, Manageable Risks Ahead for NVDA StockActivision sales slow, Manageable Risks Ahead for NVDA Stock

Source: Shutterstock

Nvidia stock fell alongside gaming stocks as video game sales waned, but the slowdown in game sales is manageable. The gaming sector faced a slowdown in sales, specifically with ActivisionBlizzard (NASDAQ:ATVI) and ElectronicArts (NASDAQ:EA). Both firms reported weak quarterly results and forecast slower sales earlier this year.

Yet the drop in sales for big game titles is company-specific. The product pricing is easy to fix. Consumers are unwilling to pay more for the same game year after year. EA and Activision need to limit in-app sales to win back its fans.

Video game digital distribution platform Steam has yearly summer sales deals that will attract bargain-hunting gamers. These gamers who buy older titles may decide to upgrade their PC system with the latest mainstream Nvidia card. Even if they opt for previous generation GPUs, both Nvidia and AMD stand to benefit.

3) Valuation of Nvidia Stock

Nvidia nvdaNvidia nvda

Click to Enlarge
At a recent price of $160, NVDA stock is inexpensive at 22 times forward earnings. 28 analysts who cover Nvidia stock think the stock has potential gains ahead with an average price target of $183. The 15.2% potential upside is a modest and reasonable expectation.

Nvidia’s non-GAAP operating income peaked in the first quarter of 2019. Still, it may have bottomed out recently after it drew down inventory and refreshed its GPU product line.

A pessimistic investor may forecast revenue growth lagging this year but rebounding back to the 20% range between FY 2022 – FY 2024. In this scenario, a five-year DCF Growth Exit Model suggests the stock already trades close to fair value.

As of this writing, Chris Lau did not hold a position in any of the aforementioned securities.

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AMD Reportedly Slashes Prices On Graphics Card Ahead Of Launch

With the company locking horns with NVIDIA Corporation (NASDAQ: NVDA) in the graphics card market, it appears AMD has found it prudent to …

Advanced Micro Devices, Inc. (NASDAQ: AMD) shares have been on a roll in recent sessions, rallying about 13% since the company reported first-quarter results in late April.

Much of the upside in the shares has come on the back of AMD’s product momentum.

With the company locking horns with NVIDIA Corporation (NASDAQ: NVDA) in the graphics card market, it appears AMD has found it prudent to sacrifice margins to build market share.

A Tactical Move

AMD’s RX 5700 series, which was unveiled at the Computex expo in late May and is based on the 7nm Navi architecture, is likely to see price cuts, Video Cardz reported, citing two sources.

The Radian RX 5700 XT and RX 500 are set to be launched July 7.

Nvidia’s RTX GeForce Super — a refresh of the GeForce RTX lineup of GPUs — was unveiled in early July.

Nvidia’s Position

Nvidia’s newest graphics card series has three products: the RTX 2060 Super, RTX 2070 Super and RTX 2080 Super. The Super graphics card series promises enhanced performance over earlier iterations, but at comparable pricing.

If AMD does slash prices and if the RX 5700 series lives up to the performance claims made by the company, Nvidia could be at a disadvantage.

Stay tuned to this graphics rivalry as AMD prepares to confirm pricing July 6, a day ahead of the commercial launch.

AMD shares were down 0.69% at $30.98 at the time of publication Friday, while Nvidia shares were down 2.65% at $158.44.

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3 Reasons to Take a Shot at Nvidia Stock Now

The past nine months have been nothing less than miserable for Nvidia (NASDAQ:NVDA). Since peaking near $293 per share in October of last year, …

The past nine months have been nothing less than miserable for Nvidia (NASDAQ:NVDA). Since peaking near $293 per share in October of last year, Nvidia stock price has dropped to a low of $124.46, and its couple of rebound efforts in the meantime have been less than permanent.

Can Nvidia Stock March Back to $200?Can Nvidia Stock March Back to $200?

Source: Shutterstock

The current Nvidia stock price near $163 is still just over half of what it was less than a year ago.

Certainly the underpinnings of NVDA’s weakness are understandable. They include the rebirth of rival Advanced Micro Devices (NASDAQ:AMD), the implosion of the cryptocurrency mining industry and a tariff war with China, all of which are still key factors weighing on investors’ minds.

The degree of the punishment doesn’t fit the scope of the crime, however, and three recent developments may well prove to be the excuse sidelined bulls are waiting for to file back into NVDA.

RTX Super Cards

Whether it’s by design or just a simple coincidence is unclear, but the two big graphics processing powerhouses — AMD and Nvidia — rarely launch new products at the same time.

That dynamic let Advanced Micro Devices steal some graphics processing unit (GPU) market share last quarter, driven by purchases of AMD’s then-new 7 nanometer Radeon VII as well as its updated Polaris family.

NVDA appears to have only been biding its time, however. The company’s new GeForce RTX 2070 Super and GeForce RTX 2060 Super graphics cards, launching this month, deliver more power at the same price AMD is charging for its most comparable discreet GPUs.

The current quarter could be better than expected for NVDA.

Getting a Cheap Price From Samsung

Rather than tapping Taiwan Semiconductor Manufacturing (NYSE:TSM) as the manufacturer of its Ampere GPUs slated to debut in 2020, NVDA has asked Samsung Electronics (OTCMKTS:SSNLF) to handle the load. That may mean little on the surface to the layperson, but to technophiles, it matters.

Details of the deal are scant, but most credible rumors seem to suggest that Samsung offered Nvidia a price it couldn’t refuse. Either NVDA will enjoy wide margins on the GPUs or it will be able to pass those savings along to customers.

It’s often a risky move to switch suppliers and contracted manufacturers. Samsung has done similar work for NVDA in the past, though, and the Korean firm isn’t exactly an unknown name in the business.

Mellanox

Finally, in March of this year, Nvidia announced that it intended to buy Israel’s Mellanox Technologies (NASDAQ:MLNX), which makes internet switches and adapters, offering $6.9 billion in cash for the company.

China, however, could still scuttle the deal.

Chinese regulators could claim the pairing violates its antitrust standards. It’s a stretched argument, but that scenario could still play out And, given the trade war tensions in place now, Beijing could easily run such interference for purely political reasons.

Following a relatively amicable G20 summit that ended in an agreement to at least not impose any new tariffs on trade between China and the United States, however, China may choose to offer another olive branch by not impeding the acquisition.

Mellanox would provide Nvidia with an even stronger hold on the data center market.

The Bottom Line on NVDA Stock

Don’t kid yourself. For better or worse,rhetoric and perception has done most of the damage to Nvidia stock, and it’s a change in the rhetoric and perception that will lift Nvidia stock price again. This is, as much as anything else, a psychological situation.

None of the three aforementioned developments is earth-shattering, but all are high-visibility developments that can quickly improve sentiment towards Nvidia stock, setting the stage for a sizable rebound.

But there’s still the impasse with China, which supplies Nvidia with half of its revenue. Even with no new tariffs being established, existing ones remain in place. There’s little doubt that NVDA has felt their impact.

Eventually, however, the tariffs will be rescinded or Nvidia will figure out a way to adapt to them. The deeper dive into data centers is one such adaptation. Switching production of its GPU to Samsung is another.

Meanwhile,analysts’ average price target for Nvidia stock is about $182; the most bullish analyst has a $225 price target on the name. Though those are forward-looking targets on NVDA, the company’s got enough fresh firepower in its arsenal to justify prices somewhere between those two figures.

It increasingly looks like investors are starting to recognize that reality, too.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley.

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