Nvidia jumps 6% to a record after new Street-high price target says it can surge another 17% within a year

nVIDIA at the E3 2017 Electronic Entertainment Expo in Los Angeles Reuters

Shares of Nvidia surged as much as 6% to an all-time high of $US491.32 on Monday after Susquehanna boosted its price target on the company to the Wall Street-high.

Susquehanna analyst Christopher Rolland raised his price target on Nvidia to $US540 from $US450, implying that the company could surge an additional 17% in the next year from Friday’s close. Rolland also reiterated his “positive” rating on shares of Nvidia.

The price target upgrade comes just days before Nvidia will report its second-quarter results and give a forward guidance on August 19 after the closing bell.

“From a high level, C2Q20 appears solid as both Datacenter and Gaming continue to benefit from stay-at-home orders, while C3Q20 will likely benefit from the launch of Ampere Gaming GPUs,” said Rolland, adding that there’s a “favourable setup that leaves room for NVIDIA to upside consensus.”

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Rolland also expects that Nvidia will announce the Ampere gaming graphics processing units on September 1, which could help offset a second-half slowdown for the company. The timing of this launch may be a tailwind for guidance, as sales would begin at the end of September and lead to “at least one month of revenue from the new cards in the October quarter,” according to the note.

In addition, Nintendo Switch “sales strength should continue in 2H and could provide some modest upside as reports suggest Nintendo is increasing 2020 production by an incremental 3 million units,” according to the note.

“While Intel and others prognosticate a 2H data centre slowdown, we believe the setup remains more favourable for NVIDIA, helped by the relatively new launch of the A100,” said Rolland.

Shares of Nvidia have gained nearly 108% year-to-date.

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