NVIDIA—a long-term racehorse
Wall Street analysts have a “buy” recommendation on NVIDIA (NVDA) as they’re optimistic about the company’s long-term growth opportunities in gaming, artificial intelligence, professional visualization, and autonomous driving. However, they’ve reduced their one-year price target on the stock, believing fiscal 2020 will be a tough year for the company.
Analysts see buying opportunity in NVIDIA
According to a CNBC article, Bank of America analyst Vivek Arya stated that NVIDIA’s fundamentals and long-term growth remain strong. He added NVIDIA is among the few chip companies that can grow at a compound annual rate of 15%–20%, driven by its leadership in several high-growth markets. However, its weak short-term guidance has pulled the stock down significantly, presenting a buying opportunity for long-term investors.
The CNBC article stated that Evercore ISI analyst Kirk Materne shares a similar view of buying NVIDIA in its current dip. He stated that management fundamentally misunderstood the impact of the crypto bubble burst, because of which it lost some credibility, and investors discounted the stock significantly. He believes long-term investors would be rewarded for staying invested as AI opportunities drive future growth.
Advanced Micro Devices (AMD) is also making its way into AI, but its high valuation makes it an unattractive buy at the current price. Intel (INTC) is another attractive stock to get exposure to AI, but its relatively low efficiency ratio makes it the second-best after NVIDIA.
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