Trading near yearly highs and at a 60x P/E, expectations for Nvidia (NVDA) are very high. If history repeats itself, the company will exceed analyst expectations and deliver yet another blowout quarter in its earnings report.
Ahead of the report, analysts are upgrading the stock. Canaccord raised its price target from $97 to $120. Jefferies thinks Nvidia is worth $125 a share. The upgrades are “safe” calls because AMD’s (AMD) earnings report already demonstrated strong graphic cards sales during the holiday season. Nvidia’s 1060 GTX is a mainstream card for hardcore gamers that likely sold a healthy number in December.
Nvidia’s GPU solutions for professional, cloud, and AI probably continued growing. In January, Nvidia announced more deals that would solidify its chips solutions for automobiles. It broadened its deal with Mercedez-Benz to develop AI cars.
On the markets, Nvidia’s stock is trading above its long-term upward trend. Since November, the stock moved higher as it priced in the prospects of NVDA chips in automotive. By comparison, the self-driving tech titan supplier like Ambarella (AMBA) is slumping, while Tesla’s (TSLA) ~35 percent return in the quarter trails that of Nvidia’s 67% return.
As the best performing stock in 2016, Nvidia’s quarterly report may lead to the stock’s outperformance again this year.
