Is Nvidia worth buying now?
The largest chip maker in the US saw its shares decline despite a trio of price target upgrades this week.
- Nvidia Corp (NASDAQ: NVDA) share price ended 2.3% lower on Thursday (08 July 2021)
- This trailed the S&P 500, which finished the day 0.86% lower
- The stock’s decline was also despite bullish price revisions newly issued by Truist, Oppenheimer and KeyBanc analysts
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Nvidia stock price: What’s the latest?
Nvidia shares closed 2.3% lower on Thursday, despite new price target upgrades.
Truist Securities analyst William Stein was much more bullish in his latest investment thesis, lifting his firm's price target on Nvidia to US$910 from US$768 previously, while maintaining a ‘buy’ rating on the shares.
The analyst wrote that the data centre end market is likely to ‘continue to grow rapidly’, based on an analysis of sector trends.
Stein also increased his 2022 earnings per share estimate for Nvidia to US$18.13 from US$17.08 in his latest note published earlier in the day, citing an analysis of the company’s software monetisation figures.
Finally, he believes that the chip maker will remain a leader in parallel computing solutions, which will continue to drive its long-term structural growth.
How do other analysts view NVDA shares?
Oppenheimer’s equity research team also raised its price target on NVDA to a much more optimistic US$925 from US$700 before, alongside an unchanged ‘outperform’ call.
Analyst Rick Schafer predicts that Nvidia, along with other semiconductor stocks, are likely to beat analyst estimates in the upcoming quarters, as sectoral demand remains strong across the board.
KeyBanc analyst John Vinh was the most bullish of the lot, raising his firm’s price target to US$950 from US$775.
He maintained an ‘overweight’ recommendation on the shares, citing a recent confirmation that gaming demand remains robust and has not been inflated by cryptocurrency mining trends.
The stock has rallied 14.7% in the last one month. The latest analyst sentiments published by MarketBeat show a consensus rating of ‘buy’ and price target of US$720.32 on NVDA.
The price target equates to a potential 9.5% downside from the counter’s last traded price of US$796.11.
Nvidia’s ARM takeover deal gets boost
Nvidia shares rallied 3.5% after three of the world’s largest chip makers publicly endorsed its proposed US$40 billion acquisition of UK-based semiconductor group Arm Ltd.
They included Nvidia’s US rivals Broadcom Corp. and Marvell Technology, Inc., as well as Taiwan-based MediaTek Inc.
That update saw Citi analyst Atif Malik raising the success probability of the ARM acquisition deal to 30% from 10% previously.
The analyst said that the news is a ‘big step forward’ and that UK authorities will probably end up approving the deal because of Nvidia’s commitment to investing more into Arm.
However, Malik believes that China is less likely to approve the deal and that the ‘path remains narrow’, as it could potentially hurt their access to Arm.
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