The Nvidia Analyst
Analyst Matthew Bryson reiterated an Outperform rating on Nividia shares and hiked the price target from $311 to $340.
The Nvidia Thesis
At the GTC Keynote conference Thursday, CEO Jensen Huang is likely to introduce the company's new Ampere architecture, Bryson said in a Wednesday note. (See the analyst's track record here.)
The analyst expects Nvidia to report upside to Wedbush's first-quarter estimates and also provide improved guidance when it reports May 21.
Wedbush is looking ahead to mixed performance by the gaming segment amid better gaming demand and retail channel disruption, he said.
Data center is likely to report upside to estimates due to improved hyperscale spending and indications of elongated lead times, Bryson said. The analyst said he expects the sales upside to boost margins.
Wedbush is also calling for upside in visualization given the work-form-home trend and stronger demand for virtual desktop infrastructure.
The automotive segment is likely to see weakness, the analyst said, adding that this segment has the lightest gross margins.
"Net, while puts and takes make it difficult to gauge whether sales are in-line or better, we would expect mix will benefit margins and earnings."
Looking ahead to Nvidia's guidance, Bryson said he expects even more upside in data center sales and a 17-cent accrual related to the Mellanox acquisition after netting out the impact of debt.
NVDA Price Action
At last check, Nvidia shares were down 1.71% at $306.77.
Photo courtesy of Nvidia.