Nvidia (NVDA) – Balanced case for Nvidia: Bullish analyst grows concerned about chipmaker’s prospects
- nvidia company NVDA Detailed in the new US licensing requirements for exports to China and Russia, acknowledge needham Analyst Rajvendra S. generation.
- Future A100 (and eventually H100) exports are subject to licensing requirements.
- The company has included $400 million in potential data center sales (primarily related to the A100) in its 3Q23 directory in accordance with the new requirements.
- In Gill’s view, the government’s hard-line stance is a major headwind for business.
- Gill lowered his data center estimates to account for this risk.
- Repeat purchase on Nvidia. Its price target moves from $185 to $170 on its non-GAAP financial year 24 (CY23) discounted estimate of $4.61 (down from $5.00).
- Analyst procurement ratings to be considered in attractive valuation, superior balance sheet and AI capability will be critical during the COVID-19 outbreak, especially in terms of medical research and genomics. Data center builds are robust as the cloud accelerates across the globe.
- Gill said the data center, the end market he sees as NVDA’s most important growth driver, is seeing a recovery as massive sales have increased in the past few quarters and visibility has improved.
- He expects that the competitive dynamics in the data center market will put pressure on the company’s positioning in the long term.
- However, many industries will transition to AI-based systems faster. Moreover, game sales are expected to rebound after COVID-19, especially with the rise in the number of games with ray tracing capabilities.
- price movement: NVDA shares were trading 1.66% lower at $137.12 at the latest check on Friday.
- Image via Wikimedia Commons
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