- Nvidia (NASDAQ:NVDA +8.8%) is "migrating from [being] a consumer-orientated company towards one that focuses on stickier and more profitable markets, such as autos, enterprise/datacenter, and HPC," says Needham's Rajvindra Gill, upgrading shares to Buy following the GPU giant's FQ2 report.
- Stifel's Kevin Cassidy offers a similar thesis, and also predicts PC GPU sales will get a lift from major 2H game launches.
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Morgan Stanley, Deutsche, and others note Nvidia's solid FQ3 guidance comes even though AMD reported a Q2 decline in GPU shipments to graphics card channels, and offered light Q3 guidance - Nvidia sold off in response.
- Of note: AMD blamed the Q2 decline on weaker demand from cryptocurrency miners, a niche it has had more exposure to than Nvidia.
- Nonetheless, MS and Deutsche remain cautious due to valuation. After backing out net cash, Nvidia currently goes for 14.6x FY15E (ends Jan. '15) EPS and 13.2x FY16E EPS.
- Prior Nvidia earnings coverage