UBS analyst Timothy Arcuri raised his price target on the Santa Clara, Calif., company 25% to $300 from $240. He affirmed his buy rating on the stock.
While Nvidia "is continuing to outperform the PHLX Semiconductor Sector Index/S&P 500 by a wide margin over the last three months," the new price target is the next stop for the stock, Arcuri said in a note to investors.
"The setup continues to be favorable as Street estimates look conservative," he said. "And we see a path to about $10 of earnings per share in calendar 2021 (non-GAAP) on the back of a new 7-nanometer (Ampere) product cycle in both data center and gaming."
On the gaming side, Arcuri said, "7-nanometer (initially at Samsung (SSNLF) ) should reestablish the price/performance gap with Advanced Micro Devices (AMD) - Get Report even as Navi proliferates up the stack."
"Since our upgrade almost 12 months ago, NVDA remains one of our top ideas in semis as product cycle is a better differentiator than 'playing the cycle' in semis, especially given how much multiples have expanded," he said.
Harsh Kumar, analyst with Piper Sandler, reiterated his overweight rating and $275 price target on Nvidia.
"In recent meetings with management," he told investors, "the company highlighted its expectation to maintain its current share in the videogame market against AMD.
"In our survey, roughly half of gamers are unlikely to use an AMD GPU for their videogame experience, with another 27% indifferent."
Kumar said this suggests to him that "there is still a high affinity toward Nvidia in the market, with users still hesitant to make the switch to AMD."
"We continue to believe Nvidia’s graphics-processing units are the `must-own' gaming cards for the videogame industry," he wrote.
At last check Nvidia shares were off 0.5% at $248.87.