Nvidia stock falls as analysts ‘nitpick’ data-center results in record earnings report
Nvidia Corp. shares declined Thursday after the chip maker’s strong results and outlook met with some pushback from analysts on the company’s data-center business.
Late Wednesday, Nvidia NVDA,
“Nitpick if you’d like,” said Cowen analyst Matthew Ramsay in a note, referring to Nvidia’s data-center outlook versus high expectations.
“In our view, dissecting the datacenter upside is warranted, as it remains Nvidia’s largest long-term growth vertical, but also distracts from very strong F1Q22 gaming guidance which implies a fourth straight quarter of 65%+ Y/Y growth” Ramsay said. He expects Nvidia’s auto-chip sales to be the next catalyst for the company amid shortages in the auto industry. Ramsay has an outperform rating and a $665 price target.
Susquehanna Financial analyst Christopher Rolland, who has a positive rating and a $700, price target said Nvidia’s results and guidance had to be flawless but were “close.”
“All eyes (as always) were on Data Center, and the guide may not be impressive enough for all,” Rolland said. “That said, we consider the DC guidance to be ‘in the ballpark’ and remind investors that the segment can be extremely lumpy.”
Evercore ISI analyst C.J. Muse, who has an outperform rating and a $675 price target, said Nvidia remains his top growth idea in chips, but still pointed to data center as a disappointment.
“While results and guide came in in-line if not better than buy-side expectations, the outlook for the all-important Data Center business disappointed on the margin,” Muse said.
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Jefferies analyst Mark Lipacis, who has a buy rating and a $680 price target, said an investor pullback because of flat data-center sales presents a buying opportunity as it did back in late 2018.
“We observe that datacenter spending on processors has recently been exhibiting periods of above-trendline growth followed by periods of digestion, and that the datacenter is in a digestion period now,” Lipacis said.
Nvidia shares declined more than 5% in the morning session to $547.27, while the PHLX Semiconductor Index SOX,
Of the 39 analysts who cover Nvidia, 30 have buy ratings on the stock, seven have hold ratings, and two have sell ratings, according to FactSet. The average price target on the stock rose to $628.22 from a previous $613.21 Thursday, according to FactSet data.
