Nvidia Corp. (NVDA) blew Wall Street's already high expectations out of the water on Thursday.
The chip giant reported big beats on its top and bottom line for the fiscal third quarter, helped by continued strength in its gaming, data center and auto chips segments. On an earnings call with investors, CEO Jensen Huang said Volta, the company's GPU built specifically for AI and machine learning tasks, is quickly becoming a best-selling product, attracting support from "every major cloud provider," including Amazon.com Inc. (AMZN) , Alphabet Inc. (GOOGL) and others.
Shares of Nvidia were climbing 4.1% to $213.69 in early trading on Friday after opening at fresh all-time highs. Nvidia shares have jumped more than 92% so far this year vs. the Nasdaq's 25% rise and the S&P 500's 15% gain.
Analysts were bullish on Nvidia following the results. Here's what they had to say about the quarter:
Ambrish Srivastava, BMO Capital Markets (Underperform, Price Target raised to $135 from $90)
"We have to give credit to NVIDIA. The quarter was very strong, and the company delivered on very strong expectations on pretty much all fronts. The data center business rebounded strongly from the lackluster quarter last quarter. Gaming was not too shabby either, likely aided somewhat by crypto demand. The EPS upside was driven by strong leverage in the model. Guidance on both the top line and EPS is higher than our expectations as well."
Betsy Van Hees, Loop Capital Markets (Buy, PT raised to $235 from $205)
"We believe with expectations incredibly lofty heading into the print NVIDIA Corporation (NVDA) delivered a very big beat and raise that even the most bearish of bears couldn't find anything to complain about...We maintain our Buy rating on NVDA and increase our PT to $235 from $205 as we think the stock will continue to move higher as strong year-over-year earnings and revenue growth will be fueled by gaming and the ongoing diversification of the model to an end-to-end solutions provider of hardware and software for the rapidly growing data center and automotive end-markets."
Romit Shah, Nomura (Upgrade to Neutral from Reduce, PT raised to $190 from $110)
"We've been bearish for most of this year, anticipating that a slowdown in gaming would drive sharp revenue deceleration in 2017. However, Nvidia demonstrated good diversity in gaming with Nintendo Switch and crypto-currency, offsetting weakness in core gaming earlier in the year. In addition, Datacenter results have been stronger than forecast and we underestimated the value the market would assign to this franchise."
Blayne Curtis, Barclays (Equal Weight, $225 PT)
"Reported a sizeable beat-and-raise lapping tough comparisons, particularly in Datacenter (+108% y/y). From here, comps do continue to stiffen further and competition should increase (Intel Corp. (INTC) announcement to enter highend discrete GPUs yesterday), but the company has shown no signs of slowing down and has a sizeable lead in the training market, which it believes it can transition to inference. Net net, very solid results and the stock should continue to work on the back of the reaccelerating data center business."
Rajvindra Gill, Needham (Buy, $250 PT)
"NVDA posted a beat and raise with strength in all platforms and across all geographies. We see a growing opportunity with the introduction of Volta - opening up the previously untapped inference market; paired with continued strength in its core gaming business as customers upgrade to Pascal ahead of the holiday season."
William Stein, SunTrust Robinson Humphrey (Buy, PT raised to $253 from $200)
"NVDA delivered a nearly perfect beat and raise, led by strength in Gaming and Datacenter...After spending 2 days at NVDA's GTC conference in DC last week (call us for details), we are ever more confident in our thesis in the AI market: that NVDA's leading position in AI is based less on its GPUs and more on stickier business aspects like its culture of innovation, software tools, and ecosystem of incumbency."
Michael McConnell, KeyBanc Capital Markets (Sector Weight)
"Strong GPU demand from the cryptocurrency mining market has rapidly depleted excess channel inventory and buoyed strong OEM sales, which offsets our prior concerns regarding gaming segment growth for the remainder of FY18."
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