The stock wavered in post-market trading Thursday after earnings and was up 0.2% in early trading Friday to $210.29 a share. The stock is up 6% in the past month.
Revenue was $3.014 billion, beating Wall Street expectations of $2.92 billion. Earnings per share was $1.78, beating analysts expectations of $1.58.
Guidance for the fourth quarter of 2020, the current quarter, was soft, however. Management said it is looking for revenue of $2.95 billion, against analysts hopes of $3.066 billion, although the gross margin guide beat (64.5% v. 62.6% expected). Nvidia said data center would be a significant part of the revenue picture for the quarter, with some gaming chip sales offsetting those results.
Here's what the analysts said:
Morgan Stanley, Equal-Weight, Price Target Increased From $180 to $217
"We have been surprised at the strength in the stock, and valuation leaves little room for error, but the company is back in growth mode. Data center rebounded in line with our expectations, though with stronger cloud (in fact, record cloud) and weaker enterprise/DGX, which surprised us. Data center sales growth was also guided to persist in the January quarter, we think double digits sequentially, which is a positive. Our numbers come up slightly, on slightly better gross margins and a slightly lower share count... multiple up from 30 times to 35 times, on slightly higher numbers, which brings our price target up from $180 to $217."
- Joseph Moore
Goldman Sachs, Buy, Price Target Increased From $190 to $220
"We believe visibility in Nvidia's high-margin Datacenter business is improving, as overall hyperscale spending patterns recover and the company gains further traction in inference. Bottom line, we reiterate our Buy rating on the stock and remain firm believers of the company's attractive long-term growth profile and competitive position. Data center outlook improving. Third quarter Data center segment revenue grew 11% quarter-over-quarter and declined on a year-over-year basis at a slower rate than the previous quarter, marking what we believe is the bottom of the current cycle."
- Toshiya Hari
Alliance Bernstein, Market-Perform, Price Target Increased From $150 to $190
"All in, results were reasonably decent, with gaming weakness not entirely unexpected, and at least recovering from the crypto troughs, and with implied data center guidance seemingly roughly in-line with Street expectations. Our estimates change only marginally today). In general though the print is unlikely to be significantly thesis-moving either way. But we roll our valuation horizon forward, and increase our target price to $190."
- Stacy Rasgon
Barclays, Neutral, Price Target Raised From $170 to $225
"Concerns have lingered all year that January was a high bar, so the below consensus guidance is disappointing but not entirely a surprise. Data Center grew but missed consensus yet the expectation for strong growth into January ahead of a likely 7nm launch is likely enough for investors to hang their hat on. Our price target of $225 is based upon 40 times our fiscal year 2021 GAAP EPS of $5.58. Our prior price target of $170 was based upon 31 times our 2021 GAAP EPS of $5.42. We increase our price target multiple due to strength in the data center market coupled with less sensitivity to the multiple given the expansive total addressable market.
RBC Capital Markets, Outperform, Price Target Unchanged at $251
" Overall, we view the Nvidia print as immaterial after the notable run-up intra-quarter. We continue to believe the stock will be higher in ~6-9 months; however, we think it will take a series of solid data center results for this to occur (we think Jan-Oct-quarter will be above seasonal and for this reason remain positive). Near-term gaming results were better than consensus; however, Jan-qtr is a bit light and is weaker due to seasonality and likely Nintendo switch, 3) gross margins were guided up again q/q suggesting improving mix shift to data center which is a sign of recovery in our view. Net Net: we see no change to our thesis, and if the stock lags ahead of the data center product launch, we would accumulate on weakness. While revenues were a tad below [for guidance], we think this is due to product launch timing of a Data Center product to come shortly."
- Mitch Steves