Why NVIDIA Might Keep Running

While Fools should generally take the opinion of Wall Street with a grain of salt, it's not a bad idea to take a look at particularly stock-shaking analyst upgrades and downgrades -- just in case their reasoning behind the call makes sense.

What: Shares of NVIDIA (NASDAQ: NVDA  ) gained slightly this morning after Susquehanna upgraded the graphics chipmaker from negative to neutral.

So what: Along with the upgrade, analyst Chris Caso boosted his price target to $14 (from $10.50), representing about 11% worth of downside to yesterday's close. While Caso isn't exactly bullish on NVIDIA's appreciation prospects, he thinks that better graphics processing unit, or GPU, trends could stabilize the stock's risk going forward.

Now what: Susquehanna thinks that NVIDIA's risk/reward trade-off, although still not attractive, is certainly improving. "Our most recent checks have noted an improved tone within NVDA's GPU business, mainly due to product shortages by AMD (NYSE: AMD  ) that are limiting the competitive pressure," noted Caso. "On Tegra, we still hold low expectations for this business, but after a year of estimate reductions, Street estimates are down sharply as well." When you couple those improved trends with NVIDIA's reasonable forward P/E of 20, I'd agree that stock is at least worth looking into.

More compelling ways to grow
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.


Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 10, 2014, at 9:51 AM, kjurden wrote:

    NVDA has lost GPU market shares to competitor...AMD.

    AMD is a far better investment at this time...

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2820510, ~/Articles/ArticleHandler.aspx, 8/28/2014 9:28:00 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement