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Nvidia Stock Climbs as Citi Lifts Price Target Following Share Split

Nvidia extends gains after Citigroup analyst Atif Malik lifts his one-year price target following the graphics card maker's 4-for-1 stock split.

Nvidia shares rose on Thursday, extending Wednesday’s gains after Citigroup analyst Atif Malik lifted his price target on the stock following a 4-for-1 split.

Malik raised his one-year price target on Nvidia to $223 from $180 and kept his buy rating on the shares following the 4-to-1 split which took effect this week amid what he sees as recovering demand for Nvidia’s chips and graphics cards, despite the recent pullback.

Specifically, Malik said in a research note to clients that he views any crypto- or gaming-driven pullback in the second half of 2021 as a buying opportunity as Nvidia gears up to launch its next generation of graphics cards and processors in 2022, and its Grace CPU in early 2023.

In May, Nvidia announced a 4-for-1 stock split to make it easier for employees and outside investors to buy shares. The split went into effect July 20.

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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.

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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.

TheStreet’s Jim Cramer has been bullish on Nvidia for some time, not only because of the company’s longer-term prospects but also because of its plan 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 crypto 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 a recent Real Money column. "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."

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 0.76% at $195.58. The stock us up 2.77% in the past month and more than 48% 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.