NVIDIA Corp "June Taiwan Export Data Dips M/M on Normalization; Underlying..."

Research evidence excerpt

NVIDIA Corp "June Taiwan Export Data Dips M/M on Normalization; Underlying..."

Forecast returns

Forecast price appreciation 38.1%

Forecast dividend yield 0.5%

Forecast stock return 38.6%

Market return assumption 9.2%

Forecast excess return 29.4%

Company Description

NVIDIA Corp. designs and manufactures graphics processing units, add-in boards, and

related low-level software. Its Graphics Processing Unit segment includes GeForce for high-

end video games and professional graphics workstations; Quadro for designers; DGX and

Tesla Accelerator cards for data center and AI scientists; and GRID for cloud-based visual

computing users. The Tegra Processors segment provides processors that enable embedded

computer vision applications in automotive video surveillance end markets, as well as

delivering multimedia experiences on mobile gaming platforms, while consuming minimal

power.

Valuation Method and Risk Statement

NVDA: Our price target is based on applying a P/E multiple. NVIDIA company-specific risks

include: 1) competition from AMD in graphics processors (GPUs) and professional

visualization products, which historically have driven the bulk of the company’s gross profit,

2) intense competition in ARM-based applications processors, where rivals seek to leapfrog

NVIDIA's early lead in dual-core technology, 3) emerging competition from Intel with its

many-integrated core (MIC) processor family vs. the company's professional GPU computing

products, where Intel's approach could be more flexible and easier to develop software. In

addition, NVIDIA faces the semiconductor sector risk where revenue trends have historically

been linked to corporate profitability, which could be challenged for robust growth, as the

economic recovery has been more subdued vs. prior deep downturns.