Nvidia gets Street-high price target at BofA after Ampere GPU launch

Sep. 02, 2020 7:50 AM ETNVIDIA Corporation (NVDA)NVDA, TSM, SSNLF, SSNNFBy: Brandy Betz, SA News Editor99 Comments
  • After yesterday's Ampere gaming event, BofA raises Nvidia's (NASDAQ:NVDA) price target from $600 to $650 while maintaining a Buy rating.
  • Key quote: "The main takeaway from NVDA's Ampere gaming event held earlier is that mainstream RTX 3080 and 3070 cards (which per NVDA have largest inter-generational performance boost, 2x+ vs. Turing and Pascal) are priced at $699 and $499, which is unchanged from their prior-gen Turing versions, and are $100 cheaper than the speculated $799/$599 pricing ahead of the event."
  • BofA thinks Ampere adds the performance boost for traditional and ray-traced games even on traditional games, unlike Turing.
  • The firm notes that the cards will be manufactured on Samsung's (OTC:SSNNF,OTC:SSNLF) 8nm process instead of main foundry TSMC's (NYSE:TSM) 7nm process. But the firm thinks TSMC is still handling the data center Ampere products.
  • BofA thinks the new Ampere cards can "drive a solid replacement cycle" for the roughly 75% of Nvidia's deployed base that's still using Pascal or prior-gen cards, driving upside to the conservative gaming segment sales growth estimates of 15% Y/Y for CY21 and 8% for CY22.
  • Nvidia shares are up 4.7% pre-market to $579.
  • Previously: Nvidia announces RTX 30 Ampere GPUs (Sep. 01 2020)

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