Nvidia (NVDA) - Get Report was climbing 4.5% to $220.44 Monday after an analyst at Morgan Stanley upgraded shares of the semiconductor maker to overweight from equal-weight and increased his price target to $259 from $217.
Analyst Joseph Moore said in a note to investors that he believes the Santa Clara, California-based company is positioned for growth in 2020 in light of an expected acceleration in its gaming and data-center segments.
Moore believes Nvidia will experience solid growth in both of these businesses despite a challenging semiconductor environment.
"Both gaming and data center fell short of expectations over the course of 2019," he wrote, "and we were surprised at how well the stock was doing in light of that. But the stock has not meaningfully outperformed the robust semiconductor group, and as we look into 2020, we see catalysts for Nvidia's growth accelerating on nearly every vector, even in what we expect will be a tough semiconductor environment."
He added that ray tracing software support would generate "more gamer enthusiasm in gaming products." In addition, new data workloads around conversational artificial intelligence should lead to another leg of data center growth.
Last week, KeyBanc capital Markets analyst
wrote that Nvidia appears to be maintaining momentum "within HPC [high-performance computing]."
Earlier this month, Nvidia reported third-quarter earnings of $1.78 a share, down 3.3% from the same period last year but ahead of the Wall Street consensus forecast of $1.58. Revenue fell 5.5% from last year to $3.01 billion, just ahead of analysts' forecasts of $2.92 billion.