Some things never change. Here's that long-ago February 13, 2017 post:
From Barron's Stocks to Watch:
Chip maker NVIDIA (NVDA) fell to the bottom of the S&P 500 today, continuing a selloff that began last week after the company posted better-than-expected fiscal fourth quarter financial results....MORE
The share price fell $5.24, or 4.6% to end the say at $108.35.
Some speculate that investors are being lured to book profits given the run by NIVIDA’s stock price over the past year. Others argue the stock has become a target for short sellers.
And the Tech Trader Daily’s Tiernan Ray cited first quarter outlook that was only slightly above consensus.
Barclays analyst Blayne Curtis, however, dinged the chip maker’s valuation, stating that despite delivering another record quarter, ths stocks is “looking expensive as comps get tougher.”
NVDA delivered another record quarter following on the big Q3 beat but guided April only slightly ahead of consensus expectations (Q2 seen down 3-5% vs. St. up 1% Q /Q). Gaming and Datacenter showed particular strength with Datacenter up >200% Y/Y and expected to continue to grow in Q1. 2016 was a truly impressive year for NVDA and we frankly can’t recall a company of this scale delivering nearly 40% topline growth for a year with strength in both the base and emerging businesses. Looking into 2017, the company faces tougher comps and the lack of a real beat leaves the stock expensive, in our view....
Here's the referenced but unlinked Tech Trader Daily piece, Friday, Feb. 10:
Nvidia Slips: Great, But Not a Blow-Out? Will AMD Take Share?
Shares of Nvidia (NVDA) are down $1.51, or 1%, at $114.87, after the company yesterday beat fiscal Q4 expectations and forecast this quarter higher as well, with growth coming across all its lines of business.
The CEO, Jen-Hsun Huang talked with me a bit about artificial intelligence and how it’s taking over software, following the results and conference call.
The reason for the stock may be simply that the Q1 outlook was only a little bit above consensus while the stock has had a big run — it is up 352% in the last 12 months. There’s some grumbling about rising expenses in the model, and some bears argue that the company faces higher competition from a rejuvenated Advanced Micro Devices (AMD)....MORE
Nevertheless, price targets, and estimates, in most cases, are rising, though some did trim their numbers for revenue this year.
Bullish!
Betsy Van Hees, Loop Capital: Reiterates a Buy rating, and raises her target to $129 from $120. “While the FQ4 2017 print wasn’t a blow out quarter like FQ3, NVIDIA Corporation’s (NVDA) results were solid. Although the FQ1 2018 raise was only slightly above the Street, we believe NVDA is trying to keep expectations reigned in so it can continue its impressive pattern of beats and raises in F2018. What positively surprised us on the call was the strong Data Center growth of 23% QoQ and the guide for Data Center to be up again QoQ in FQ1. What negatively surprised us on the call was the strong step up in OpEx in FQ1 as NVDA needs to spend to support its multiple growth initiatives in AI, autonomous cars, cloud computing, and gaming.” Van Hees raises her 2018 estimates to $7.979 billion and $3.34 per share from a prior $7.897 and $3.36.
Lena Zhang, Summit Redstone: Reiterates a Buy rating, and a $120 price target. “At the end of FQ4, inventory was $794M, up by $115M from the prior quarter. Further, inventory increased by $400M from the end of FQ1, while DOI only rose from 65 days in FQ1 to 83 days in FQ4. We believe that NVDIA is preparing another strong year for its datacenter business even after it had 145% y/y growth in F2017. In addition, strength in its datacenter business should help GM’s be less compressed by the termination of a license agreement with Intel from mid-March.” Zhang trims her 2018 revenue estimate to $7.83 billion and from $7.95 billion, while raising her EPS estimate to $3.24 from $3.17.”
Steven Smigie, Raymond James: Reiterates a Strong Buy rating, and raises his target to $140 from $125. “While we would expect stock momentum to moderate somewhat (having been on a tear since early 2016) with the seasonal slowdown limiting potential for another strong beat/raise in the April quarter, we believe the Street is beginning to appreciate the long-term growth and earnings potential related to opportunities in the Datacenter – still only 12% of total sales in FY17 and in the early innings of adoption. Despite headline noise from competitors regarding alternative architectures, we believe NVIDIA has locked in an early-leader advantage, with considerable runway for long-term growth.” Smigie raises his 2018 estimates to $8 billion and $2.78 from a prior $7.8 billion and $2.54.
Rajvindra Gill, Needham & Co.: Reiterates a Buy rating, and a $120 price target. “Nvidia delivered another stellar quarter and guide. Revenue for the qrt was $2.173B (up 55% Y/Y) stemming from strength in the Gaming and Data center. As we expect revenue growth to decelerate in Gaming to 11% Y/Y from 44% (FY2H17 benefited from 2x the number of product launches), we believe NVDA is aligned to massive revenue TAM opportunities in AI, autonomous vehicles and VR. Data Center is on a $1.2BN revenue-run rate and could accelerate as we see GPU deployments in the cloud, hyperscale and enterprise markets, all of which are benefitting from A.I. and machine learning.” Gill trims his revenue estimate for 2018 to $7.597 billion from $7.83 billion, while maintaining his $3.10-per-share EPS estimate.
Bearish!
Ambrish Srivastava, BMO Capital: Reiterates a Market Perform rating, and a $100 price target. “No blowout, but very solid. GPU strong as well. However, we think AMD has likely gained share in GPU on a q/q and y/y basis as we estimate that AMD GPU revenue increased more than 40% q/q and close to 80% y/y to ~$322 million vs. NVIDIA’s GPU revenue up 9% q/q and up 57% y/y to ~$1.85 billion. And we do recognize that we are talking about a much smaller base for AMD vs. NVIDIA.” Srivastava raises his 2018 estimates to $8.43 billion in revenue and $3.17 per share from a prior $8.3 billion and $3.10....
Recently:
"Nvidia CEO Huang: A.I. Is Just the Future of Software" (NVDA) [very interesting]
NVIDIA Guides Q1 Revenue In-Line, Warns On Margins (NVDA)
NVIDIA Beats on Top Line, Beats on Bottom Line, Stock Slips (a bit) NVDA
