Susquehanna Lifts Nvidia’s PT To ‘Street High’ Ahead of Tomorrow’s 2Q Results

Susquehanna raised Nvidia’s price target to a ‘Street High’ of $540 (9.4% upside potential) from $450 and maintained a Buy rating on the stock, amid expectations that the chipmaker will report strong 2Q results tomorrow. Shares of the chipmaker are rising 1.7% in Tuesday’s pre-market trading after jumping 6.7% yesterday.

Susquehanna analyst Christopher Rolland is optimistic about Nvidia’s (NVDA) 2Q results saying, “From a high level, C2Q20 appears solid as both Datacenter and Gaming continue to benefit from stay-at-home orders, while C3Q20 will likely benefit from the launch of Ampere Gaming GPUs (graphics processing units).”

Rolland believes “Switch sales strength should continue in 2H and could provide some modest upside as reports suggest Nintendo is increasing 2020 production by an incremental 3 million units.”

“While Intel and others prognosticate a 2H data center slowdown, we believe the setup remains more favorable for NVIDIA, helped by the relatively new launch of the A100,” the analyst added.

Wells Fargo analyst Aaron Rakers raised Nvidia’s PT to $510 (3.4% upside potential) from $430 and maintained a Buy rating. Rakers commented: “While we think mixed / negative cloud demand data points warrant some caution into the company’s upcoming earnings release, we don’t foresee anything that will disrupt our thesis that NVIDIA appears to be one of the best positioned multifaceted long-term secular growth stories in semis.”

Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 24 Buys, 3 Holds, and 1 Sell. Given the year-to-date stock price rally of 110%, the average price target of $432.96 now implies downside potential of 12.3%. (See NVDA stock analysis on TipRanks).