Nvidia shares rose 6.7% on Monday, as investors looked forward to the quarterly report of the company on Wednesday. Seven investment companies last week raised the price target on Nvidia shares, voicing their optimistic forecasts.
Shares of Nvidia (NVDA), increased by 109,7% YTD, on Monday reached a new record historic high, as a result, the market capitalization of Nvidia for the first time exceeded $300 billion, this is significantly higher than the market valuation of Intel (INTC) to $210 billion.
Experts on wall Street said that Nvidia was one of the main beneficiaries of the pandemic, as demand for its graphics processors for computers, data centers and video games have grown in isolation of people at home.
In anticipation of the quarterly report, which is expected Wednesday after the close of trading, from seven investment companies raised the price target on Nvidia shares.
Expectations for the second quarter of Nvidia high
Analysts predict that the profits from the sales of Nvidia products segment for data centers (“Datacenter”) in the second quarter for the first time will exceed the revenues of the largest gaming segment of graphics processors. According to analysts ‘ expectations, sales of Datacenter will be $1.72 billion, while sales of games segment will reach $1.4 billion.
For comparison, in the first quarter gaming as Nvidia has shown a growth of 25% to $1.34 billion, and the Datacenter segment increased by a huge 80% (compared to the previous year), the first time exceeded $1 billion, to $1.14 billion
Partially high expectations due to the fact that in the second quarter for the first time will be recorded in the sales of new high performance server processors NVIDIA Ampere A100 with a new GPU architectures. Read more about these processors Marketinfo.pro wrote in the article “Nvidia and Google have joined forces to offer cloud services high performance.“
Nvidia said it expects to earn total revenue in the second fin. quarter range from $3.58 billion to $3.72 billion, the average forecast according to the 32 analysts is $3.65 billion of revenue and $1,98 earnings per share.
The last quarter will also be the first full quarter in which you expect to receive income from the acquisition of Mellanox (the closing of the transaction took place on 27 April).
Some analysts expect continued growth for Nvidia in the second half, given that September 1, is scheduled to present the latest line of high quality playing cards.
Last week their price target for Nvidia has raised:
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BMO Capital Markets (a rating of “Superior” (Outperform)) – target price raised from $425 to $565 per share;
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Raymond James (Outperform)) from $370 to $500;
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Cascend Securities (rating of “buy”) from $450 to $540;
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BofA Securities (“buy”) from $460 to $520;
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Wells Fargo (Outperform) from $430 to $510 – analysts said they see some negative factors for business in the segment of Nvidia products for data centers in the coming quarters, but predict the further long-term growth for the company.
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Oppenheimer (Outperform) from $400 to $500.
Analyst Rick Schafer from Oppenheimer wrote: “Given the introduction of new solutions such as Tegra, for the automotive market, we expect that the dependence of Nvidia from the PC market to decline slightly. We see several sustained structural factors that contribute to the sustainable revenue growth: increased demand for games, expansion of data centers and solving problems of artificial intelligence and Autonomous vehicles.”
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Susquehanna raised its target price per share of Nvidia from $450 to $540.
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Wedbush (Outperform) from $420 to $500.
Of the 40 analysts who evaluate stocks Nvidia, 32 are rated “buy” or “Outperform”, six have a rating of “hold” and two “sell” or “underweight” (a rating of worse, overall, than neutral, but better than “to sell”). The average target price of Nvidia stock at $426,82 still below the closing price on Monday of $493,48, indicating that the forecast decline in the next 12 months.
