Nvidia (NVDA) - Get Report on Monday received an upgrade from a Susquehanna analyst, who raised his price target on shares of the graphics chipmaker two days ahead of its fiscal third-quarter results.
Christopher Rolland lifted his one-year price target to $610 from $560 amid what he expects to be continued strength in gaming and data center markets, despite near-term supply issues related to the pandemic.
That, in turn, will continue to boost demand for Nvidia’s chips over the long term, helping drive sales and earnings.
"[W]e acknowledge the possibility of shortages for Ampere in C3Q20, but encourage investors to look past the near-term supply disruption and toward the long-term, multi-dimensional growth story that should continue to play out into C4Q, early 2021, and beyond," Rolland wrote in a note to clients.
Rolland also noted that Nvidia appears to be increasing its aftermarket graphics processing unit, or GPU, market share, and is also benefitting from a steady rise in average selling prices - something that should continue to propel sales and earnings going forward, particularly with the release of new machines and new games that rely on more graphics processing power.
Nvidia is expected to report third-quarter per-share earnings of $2.57 on revenue of $4.41 billion, according to the average estimates of analysts polled by FactSet. That's up from the $3.97 billion forecast by analysts at the beginning of the quarter, and the $3.01 billion Nvidia reported a year ago.
Separately, Nvidia announced on Monday a new A100 GPU server with 80GB of high-speed HBM2e memory -- twice as much as before.
Shares of Nvidia were up 1.49% at $541.72 in trading on Monday. The stock has more than doubled year to date, and closed at a record $582.48 on Nov. 6.