Nvidia Share Price Target Up on Catalysts for New Chip Design

Nvidia’s new chip architecture will benefit from data-center and gaming product cycles, said Cowen analyst Matthew Ramsay, raising his target price.
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Nvidia’s  (NVDA) - Get Report new chip architecture will benefit from data-center and gaming product cycles, said Cowen analyst Matthew Ramsay in raising his target price on the stock.

Ramsay raised his price target on the Santa Clara, Calif., chip titan to $475 from $410 and affirmed his outperform rating.

He based his action on the product-cycle benefits for Nvidia’s new Ampere architecture, The Fly reports.

Last Wednesday, Nvidia's market capitalization for the first time surpassed that of fellow Santa Clara chip giant Intel  (INTC) - Get Report amid positive sentiment for the graphics chip specialist.

Nvidia replaced Intel as the third-largest chipmaker in the world by market cap, behind Taiwan Semi  (TSM) - Get Report and Samsung  (SSNLF)

At last check, Nvidia’s market cap totaled $248 billion, compared to $246 billion for Intel.

Nvidia shares were recently trading up 0.2% at $402.91. The shares have soared 70% year to date.

Wall Street analysts see a lot to like in Nvidia.

Last month, Susquehanna analyst Christopher Rolland raised his price target for Nvidia shares to $450 from $420.

He told clients in a note that he sees Mellanox, which Nvidia acquired earlier this year, growing at a double-digit rate over the next three to five years. He estimated that Mellanox could add $30 billion to Nvidia's market cap.

In its first-quarter-earnings release, Nvidia reported a combination of tailwinds that drove a sizable earnings and revenue beat, despite the coronavirus pandemic.

Nvidia's data-center segment rose 80% year-over-year and topped $1 billion in sales for the first time in the first quarter.

The company's extensive footprint in gaming was also a boon in that period, which was the first that overlapped with the covid-19 pandemic.