- New Street analyst Pierre Ferragu upgraded NVIDIA Corp (NASDAQ:NVDA) to Buy from Neutral with a price target of $280 (30.2% upside).
- Ferragu saw an attractive valuation, greater visibility on the "crypto-winter risk," and the company's robust data center outlook.
- Ethereum's hash rate quadrupled between October 2020 and January 2022, likely boosting Nvidia's FY22 gaming revenues by about $2 billion.
- However, mining demand, GPU retail, and second-hand prices have normalized with the hash rate plateaued.
- Nvidia's relative multiple contracted by 30% with the crypto correction and a further 20% as the data center outlook weakened in 2018-19.
- He saw any weakness driven by crypto would be "limited, short-lived, and only an opportunity to add to positions," given that the secular outlook for gaming, visualization, and data center is "still very strong."
- BofA analyst Vivek Arya recently reiterated a Buy rating setting a $375 price target (71.1% upside) on the stock for similar reasons.
- Baird recently downgraded the stock, citing GPU order cancellations, demand slowdown, and Russia embargo. Truist slashed the price target citing demand slowdown.
- Price Action: NVDA shares traded lower by 3.30% at $222.14 on the last check Wednesday.
