NVidia Stock: Is the Company Now ‘Unstoppable’?

Posted On September 18, 2017 5:39 pm

NVidia Drive PX System

Investors are watching NVIDIA Corporation after Bank of America Merrill Lynch upgraded the stock, citing the company’s strengths in gaming, data center and AI. BoA analyst Vivek Arya sees NVidia as transitioning from a traditional PC graphics chip maker to a high-end end gaming, enterprise graphics, cloud, accelerated computing and automotive company. Arya thinks that NVidia will be a key player in the lucrative AI industry, which has an estimated worth of about $30 billion. The analyst increased his price target for NVidia stock to $210 from $185.

A few days ago, investment firm Evercore ISI also increased its price target for NVidia. The firm set a price target of $250 for the GPU maker. Evercore analyst C.J Muse thinks that apart from AI and cryptocurrency, NVidia’s “CUDA” software is “unstoppable.” The analyst says that Cuda has an installation base of hundreds of thousands of machines in the world.  Cuda has an excellent library and its architecture supports machine learning platforms. NVidia’s TensorRT platform provides a powerful way to program Deep Learning systems.

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Another excellent growth catalyst for NVidia is the Nintendo Switch gaming device, which is getting intensely popular around the world. Nintendo Switch outsold Xbox One and PS4 in August. The console has been a bestseller in four of the six months since its release in March. The console is powered by NVidia’s Tegra X1 chip. Tegra is not NVidia’s most advanced gaming chip. Still, it has outperformed several other chips in the industry. Analysts believe that the company’s Parker chip will get the attention of major console makers in the future. Parker has a 256 core Pascal GPU section, 2 custom designed “Denver” 64 bit ARM CPU cores, and TSMC’s 16 nm FinFET process architecture.

The biggest growth driver for NVidia stock might be the company’s penetration of the driverless car industry. Its DRIVE PX system is loved by major car makers worldwide, including Tesla, which integrated the system into Model S and Model X. Chinese tech giant Baidu also announced that it will use DRIVE PX 2 in cars it’s making in partnership with Chinese automakers. NVIDIA Corporation has partnerships with Toyota, Daimler and Volkswagen. In the second quarter, NVidia’s autonomous driving platform increased by 19% to reach $142 million.

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