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A Geforce RTX 3080 Ti graphics card from Nvidia.
Nvidia provided this image.
A KeyBanc Capital Markets analyst’s positive comments aided in the push.
Nvidia
In the first trading day after the July Fourth holiday, shares rose to what could be a record high closing. In recent trading, Nvidia shares (ticker: NVDA) were up 0.5 percent at $823.42, and if the stock closes above the $819.48 high set on July 2, it will set a new high. Nvidia stock has soared this year, increasing 58 percent in response to a global chip scarcity and rising demand for its graphics chips, while the benchmark has fallen.
Semiconductor index PHLX
increased by 18%.
In a note released Tuesday, KeyBanc analyst John Vinh confirmed his Overweight rating and boosted his target price to $950 from $775. Nvidia stock has a majority optimistic sentiment on Wall Street. Eighty-three percent of analysts recommend the company as a Buy, while 12 percent rate it as a Hold. The average target price is $740.40, implying an 11 percent decline. Vinh believes his target price is reasonable because the company’s flagship videogame chips are selling well and will continue to do so for the rest of the year. Investors are concerned about Nvidia’s expanding sales of graphics chips to Ethereum cryptocurrency miners, noting how a drop in crypto prices three years ago resulted in too much chip inventory, causing the business to lose money. However, Vinh dismissed concerns that Nvidia will suffer significant losses as a result of the turbulent cryptocurrency market.
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Nvidia’s efforts to improve the mining capabilities of its videogame processors, according to Vinh, will persuade miners using graphics chips for Ethereum to buy the company’s crypto-specific chips. It introduced the mining chips earlier this year to ensure that its main market of gamers could purchase enough gaming cards. The mining products are part of Nvidia’s OEM & Other sector, which comprised crypto chip revenue of $155 million in the fiscal first quarter, according to finance director Colette Kress. In the second quarter, she estimates crypto chip sales to be around $400 million. However, purchases from miners are included in Nvidia’s videogame revenue, and Kress has stated that there is no precise method for Nvidia to publish that figure. Separately, the Semiconductor Industry Association (SIA) reported on Tuesday that global chip sales increased 26% year over year to $43.6 billion in May. Tuesday, chip stocks were neutral, and the Boston Red Sox fell 0.2 percent. “On a three-month moving basis, the industry shipped more units in May than in any preceding month in the market’s history, demonstrating semiconductor production has ramped up significantly to meet surging demand,” said SIA President John Neuffer. Max A. Cherney can be reached at max.cherney@barrons.com./n
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