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Nvidia Gains on Another Analyst Price-Target Boost

Nvidia shares gain after another Wall Street price-target boost amid expectations of strong demand for video graphics cards used for gaming and crypto mining.

Nvidia  (NVDA) - Get NVIDIA Corporation Report shares gained on Tuesday after another Wall Street analyst lifted his price target to near $1,000 amid expectations of continued strong demand for video graphics cards and related semiconductors that are used for both gaming and mining cryptocurrencies.

Keybanc analyst John Vinh lifted his one-year price target on Nvidia to $950 from $775, following in the footsteps of BMO Capital Markets analyst Ambrish Srivastava, who just last Thursday lifted his own price target on the chip titan to a Wall Street high of $1,000 from $975 and affirmed an outperform rating.

Analysts have piled on the praise for Nvidia since the company’s first-quarter results, which came in better than expected amid strength in so-called hyperscale data center demand, which includes demand for its graphics cards and chips using for both gaming and crypto mining.

Even before then, analysts were touting Nvidia’s performance amid strong demand for its gaming graphics cards, which surged through the pandemic and stay-at-home orders that boosted demand for at-home entertainment like video games, compounded by the ongoing chip shortage that has boosted demand - and prices - for the chips and the cards themselves.

At the same time, surging prices for Bitcoin, Ethereum and other cryptocurrencies this year also have fueled demand. Crypto miners use graphics processing units, or GPUs, to mine currencies such as Bitcoin and Ethereum. Nvidia’s latest RTX 30 series, launched last year, has proven particularly popular with miners.

TheStreet's Jim Cramer in his Real Money column on Tuesday noted another reason to be bullish on Nvidia: a potential acquisition that will beef up its business even more.

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Specifically, Jim pointed to the increasing likelihood that regulators will allow the company to buy Arm Holdings, a British company that excels in cellphones and personal computers, which will add to its already strong sales pipeline that has been driven by far more than just demand from Ethereum miners.

"I'm sure some of you might think that Nvidia is more of an Ethereum play, because its cards are used to mine the cryptocurrency," Cramer wrote. "In reality, that's a tiny portion of their business and is made up of cards that aren't up to specification for gaming, scrap if you will."

In May, Nvidia announced a 4-for-1 stock split to make it easier for employees and outside investors to buy shares.

For its fiscal second quarter which ends in July, Nvidia expects revenue of $6.3 billion at the midpoint, well above FactSet's consensus estimates of $5.47 billion, driven by growth across all its business segments, led by crypto, data center, and gaming.

At last check, shares of Nvidia were up 1.22% at $829.48. The stock has gained more than 16% in the past month and more than 56% since the start of the year.

Nvidia is a holding in the portfolio of Jim Cramer's Action Alerts PLUS investing club. Want to be alerted before Jim Cramer buys or sells NVDA? Learn more now.