Analysts’ price target on NVIDIA
NVIDIA (NVDA) is a leader in the discrete GPU (graphics processing unit) market and its advanced technology remains unbeatable by rival Advanced Micro Devices (AMD). However, the two companies were hit by the crypto wave, which brought windfall gains during its peak and equal downside during its trough.
The crypto wave just ended and gaming and data center demand weakness cropped in amid a tense macroeconomic environment. Wall Street analysts still have a “buy” recommendation on NVIDIA despite the above headwinds, as they are optimistic about the company’s long-term outlook. However, they have lowered their median price target for NVIDIA from $300 in October 2018 to $185 in January 2019. They have also lowered their bullish price target for NVIDIA from $400 to $250.
Analysts are optimistic about NVIDIA’s long-term growth
The crypto bubble burst, tensed geopolitical conditions, and weak demand from gamers and cloud companies will reduce NVIDIA’s earnings in the first half of calendar 2019. During the fourth-quarter 2018 earnings call, AMD’s CEO Lisa Su stated that revenue growth will be low or negative in the first half as the last year’s first-half revenue included sales to crypto miners.
However, growth will likely rebound for NVIDIA in the long term as the adoption of Turing GPU grows with more games supporting ray tracing. Moreover, data center growth will likely rebound, and new growth drivers could come in 2020 with the commercial launch of autonomous vehicles. Amid the current macroeconomic environment, it’s difficult to say when the growth will recover, but some analysts expect a rebound as early as the second half of the year. Next, we will see what investors think about NVIDIA.
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