Nvidia Analysts Maintain Bullish Outlook Following Q4 Data Center, Gaming Strength

Nvidia Analysts Maintain Bullish Outlook Following Q4 Data Center, Gaming Strength

NVIDIA Corporation NVDA reported strong fourth-quarter results, sending shares sharply higher in Friday's session.

The Nvidia Analysts

Wedbush analyst Matthew Bryson reiterated an Outperform rating on Nvidia and lifted the price target from $295 to $311

Needham analyst Rajvindra Gill maintained a Hold rating.

UBS analyst Timothy Arcuri maintained a Buy rating and raised the price target from $300 to $320.

Wells Fargo Securities analyst Aaron Rakers maintained an Overweight rating and $290 price target.

Morgan Stanley analyst Joseph Moore maintained an Overweight rating and lifted the price target from $259 to $304.

No Reason to Shift Bullish View

Nvidia handily beat expectations, thanks to 33% sequential growth in data center revenue to $968 million that drove $150 million revenue upside and about 100 basis-point gross margin upside. Earnings per share came in at $1.89, well ahead of the consensus estimate of $1.67.

On the flipside, Bryson said the company guided to a roughly $100 million headwind tied to the coronavirus, with the impact likely to be in the gaming segment.

"With data center momentum expected to continue, new products on the horizon that could further invigorate growth, and an accretive MLNX acquisition likely soon to be finalized, we see no reason to shift our view," Bryson wrote in the note.

Risk-Reward Profile Balanced

Nvidia's April quarter revenue guidance, implying year-over-year growth of 36%, is impressive, although off a relatively easier comparison, Gill said.

The analyst believes data center, the company's biggest growth engine, is recovering amid a ramp in hyperscaler sales and improved visibility. Competitive dynamics in the data center market could impact the company's long-term positioning in the market. Gill expects gaming sales to remain strong, as the number of games having ray-tracing capabilities continue to ramp.

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