Nvidia shares rose Thursday, extending Wednesday’s gains after Citigroup analyst Atif Malik raised his price target for the stock following a 4-for-1 split.
Malik raised his one-year price target on Nvidia from $180 to $223 and maintained his buy recommendation for the stock after the 4-for-1 split that took effect this week, amid what he sees as a recovering demand for Nvidia’s chips and graphics cards, despite the recent downturn.
Specifically, Malik said in a research note to customers that he views any crypto- or gaming-driven pullback in the second half of 2021 as a buying opportunity as Nvidia gears up to launch its next-generation graphics cards and processors in 2022, and its Grace CPU early 2023.
In May, Nvidia announced a 4-for-1 stock split to make it easier for employees and outside investors to buy shares. The split went into effect on July 20.
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Analysts have praised Nvidia since the company’s first quarter results, which came in better than expected amid strong demand for hyperscale data centers, including demand for its graphics cards and chips used for both gaming and crypto mining.
Even before then, analysts praised Nvidia’s performance amid strong demand for its gaming graphics cards, which were soaring due to the pandemic and home orders boosting demand for home entertainment like video games, exacerbated by the ongoing chip shortage that has boosted demand. – and prizes – for the chips and the cards themselves.
Jim Cramer of TheStreet has been bullish on Nvidia for some time now, not only because of the company’s longer-term prospects, but also because of its plan to buy Arm Holdings, a British company that excels in mobile phones and PCs, which will contribute to its already strong sales pipeline that has been driven by much more than just demand from crypto miners.
“I’m sure some of you may think that Nvidia is more of an Ethereum game as the cards are used to mine the cryptocurrency,” Cramer wrote in a recent real money column. “In reality, that’s a small part of their business and consists of cards that aren’t up to gaming specs, scrap if you like.”
For its fiscal second quarter ending July, Nvidia expects mid-range revenue of $6.3 billion, well above FactSet’s consensus estimates of $5.47 billion, driven by growth across all of its business segments, led by crypto, data center and gaming.
Shares of Nvidia rose 0.67% to $195.41. The stock is up 2.77% in the past month and more than 48% since the start of the year.