Thomson Reuters
- Nvidia is set to report third-quarter earnings after Thursday's closing bell.
- Shares have been under pressure, down 26%, since the large-cap-tech correction began in October.
- Watch Nvidia trade live here.
Nvidia is set to report third-quarter earnings after Thursday's closing bell.
Here's what analysts are expecting:
- Adjusted earnings per share: $1.92
- Revenue: $3.24 billion
Shares have been under pressure, down 26%, since the large-cap-tech correction began early in October. But Goldman Sachs said it's a good time to buy the dip.
"With our long-term bull thesis (i.e. significant upside to Street estimates predicated on continued growth in gaming, data center and professional visualization aided by gross and operating margin expansion) intact, we recommend investors to use the recent pullback as an opportunity to buy the stock," Toshiya Hari, an analyst at Goldman, said in a note on Monday.
"We believe this weakness is being driven largely by: 1) concerns around a potential inventory correction in the Gaming GPU business following 1H18 crypto strength and negative AMD commentary, 2) expectation for a deterioration in cloud capex trends and thus Nvidia’s datacenter business, and 3) risks around a potential recall of high-end Turing gaming GPUs following reports of product defects."
Hari has a buy rating and a $283 price target for Nvidia, about 41% above where shares were trading on Thursday.
Nvidia unveiled its new graphics-card lineup called the GeForce RTX series in August. The GPUs improve the gaming experience through features like real-time ray tracing, a rendering technology that allows for more cinematic and realistic visuals.
But those new features aren't yet available because games supporting the high-end graphics cards aren't out until 2019, leading RBC to slash its price target from $280 to $260. The firm noted that the timing causes a huge risk in Nvidia's chip transition period.
Shares were little changed for this year on Thursday.
Now read:
- Wall Street is ignoring a risk related to a key part of Nvidia's business, UBS says
- MORGAN STANLEY: Don't expect much upside from Nvidia's gaming business anytime soon
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