Brokerages upgrade price target on Nvidia following surprisingly upbeat quarterly results

Written by: Michael Harris
March 11, 2020
  • Brokerages upgrade price target on Nvidia following surprisingly upbeat quarterly results.
  • Nvidia records a 43% increase in quarterly sales driven from its data center unit.
  • Nvidia climbed 6% in the stock market on Friday following the earnings report.

Nvidia announced its quarterly performance results on Friday that surprised the analysts with stronger than expected reading for revenue. The American technology company joined its competitors like AMD (Advanced Micro Devices) and Intel in anticipating upbeat demand for advanced chips as a core component of the latest generation artificial intelligence and data centers.

Surging 6% in the stock market following the release of the Q4 earnings report, as many as 11 brokerages were reported to have upgraded their price target on Nvidia’s stock. Cowen & Co. took the lead with the highest price target of $325 ($85 increase). Wall Street currently has a median price target of $285.15 for the chipmaker. Nvidia was last seen trading at $287 per share in pre-market trading on Friday.

Nvidia Records A 43% Increase In Data Center Driven Sales

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In the fourth quarter, Nvidia reported a 43% increase in its data center driven sales. The business is primarily targeted at catering to the clients that are focused on developing innovative products in the artificial intelligence niche. Sales in the data center unit were valued at $968 million in Q4. Following the performance results, Jefferies forecasts a 34% increase in Nvidia’s data centers’ sales in fiscal 2020.

The company also highlighted on Friday that it estimates the recent break of Coronavirus in China to cost $100 million to the chipmaker. Despite the hit, Nvidia expressed confidence that its Q1 sales will beat the estimates. The upbeat guidance further fueled the expectation that global demand for advanced chips is likely to rebound in the upcoming months.

In the league of chipmakers, Nvidia was only second to Qualcomm that anticipated a major hit due to the health emergency in China that is significantly disrupting the business operations for tech companies. Nvidia’s earnings report was even surprising for the analysts since the ongoing trade war between the U.S and China as well as the slowdown in mobile phone development had previously weighed heavily on the chipmakers. The experts, however, attributed the optimism to

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IoT Appliances, Autonomous Cars, And Data Centers Keep Nvidia’s Performance Steady

IoT appliances, autonomous cars, and data centers which helped keep its performance upbeat in the recent quarter.

At the time of writing, Nvidia is exchanging hands at around $296 per share in the stock market that marks an over 25% growth in 2020 so far. On the other hand, the chipmaker’s performance in 2019 was largely upbeat that recorded a massive 85% annual gain last year.