Adding to already impressive year-to-date gains, shares of semiconductor name NVIDIA (NVDA 179.03, +9.63) trade about +5.7% higher due to a favorable analyst note out of the firm Evercore ISI.
It may serve us well to take a quick look at NVDA before we get into why the stock is reacting strongly to today’s analyst commentary. According to the company, its invention of the GPU in 1999 sparked the growth of the PC gaming market, redefined modern computer graphics and revolutionized parallel computing. More recently, GPU deep learning ignited modern AI -- the next era of computing -- with the GPU acting as the brain of computers, robots and self-driving cars that can perceive and understand the world.
At last check, in Q2 (which was reported August 10), NVDA recorded revenues growth of 56.2% year-over-year to $2.23 billion. At the time, NVDA’s Q3 guidance propelled shares even further to the upside as the stock had nearly totally escaped losses from the previous two sessions. To bring home the point, NVDA has not missed market expectations for earnings in more than two years and has posted revenues growth of better than 50% in each of its last four fiscal quarters.
Stepping back a bit further though, NVDA is part of a broader surge in the semi space and further so, the broader tech space. So it’s no surprise then that NVDA has followed suit when the PHLX Semiconductor ETF (SOX) has posted YTD gains of +26.4% while the Technology SPDR (XLK) garners YTD gains north of 21%. Other semi names posting solid YTD gains include AMD +11.3%, TXN +15.5%, MU +59.3%, ADI +15.2%.
Aside from impressive YTD gains and solid earnings, NVDA is getting propped up by the aforementioned analyst note out of Evercore ISI today. The stock busted through the early-August high near $174.50, and currently sits about 14% higher compared to the day after the Q2 report. As of now, NVDA trades about 48x estimated 2017 earnings.
Getting back to the analyst commentary now, Evercore ISI in a note out this morning bumped their NVDA price target higher to $250 from $180. The firm has been bullish on NVDA for some time however, reiterating their ‘Outperform’ rating on the name in today’s note.
In the near future, NVDA will report Q3 earnings on November 9.