CES 2024, the world’s biggest tech show, took place this week, and Nvidia (NASDAQ:NVDA) made its presence felt.
Considering the huge strides made in its Data Center business, the attention has been diverted away from what used to be the company’s main revenue generator – its Gaming segment.
But at this year’s event, NVDA unveiled the newest updates to its RTX/Ada Lovelace series of Client GPUs with the introduction of the ‘Super’ series. These offerings present enhanced performance and energy efficiency compared to the existing 40 series lineup, all touted to be at a budget-friendly cost. Furthermore, the company’s ACE (Avatar Cloud Engine) microservices provide game developers with the capability to integrate intelligent and dynamic avatars into their games, bringing generative AI to the forefront of the gaming industry.
Deutsche Bank analyst Ross Seymore, who attended the event and met with Nvidia’s top executives, emphasizes that gaming remains a top priority for the company. “Though its gaming business has fallen under the radar in recent quarters, NVDA believes the disti channel in this business remains healthy after ‘strong’ sell-through over the holiday period, and sees the emergence of the AI PC’ as potentially driving a significant gaming PC upgrade cycle over the next 12-36 months,” the analyst explained.
In the Auto business, despite the weakness flagged at competitor Mobileye, Nvidia has remained resilient. The company attributes its success to a faster and more customer-friendly development process, resulting in wins and new vehicle launches in China. With L2+ now becoming the minimum tech level demanded by Auto OEMs, Nvidia sees an “industry-wide shift towards software-defined vehicles.”
“Overall,” the 5-star analyst summed up, “we came away from our management meetings still comfortable with the company’s recent outlook provided on its last earnings call, and are pleased to see continued investment in the company’s less-flashy gaming and automotive businesses.”
However, while that sounds like an endorsement, with the shares trading very near Rosner’s $560 price target, the analyst currently refrains from getting the Nvidia bull suit on and maintains a Hold (i.e., Neutral) rating on the shares. (To watch Seymore’s track record, click here)
That said, Rosner belongs to a minority on Wall Street. While 3 others join him on the sidelines, they are thoroughly outnumbered by 32 Buys, making the consensus view here a Strong Buy. The analysts see shares climbing ~21% higher over the coming months, considering the average target currently stands at $661.64. (See Nvidia stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
