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Analysts Raise Nvidia, AMD Targets Ahead of Growth Expected in 2020

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AMD is one of Rosenblatt’s Top 3 Semiconductor Ideas for 2020

Citing his expectations for revenue and earnings growth in fiscal 2021, Benchmark analyst Ruben Roy raised his price target for Nvidia (NVDA) to $275, while his peer at Rosenblatt raised his own price target for AMD (AMD) as he believes the latter’s stock is poised for multiple expansion. 

NVIDIA REVENUE, EARNINGS GROWTH: 

In a research note to investors, Benchmark’s Roy raised his price target for Nvidia to $275 from $240 ahead of his expectations for a recovery to “strong” revenue and earnings growth in fiscal 2021. The analyst noted that he is forecasting revenue and earnings growth of 20% and 34%, respectively, following revenue and earnings declines in a challenging fiscal 2020. Roy expects Nvidia to benefit from a reacceleration of data center spending, coupled with an improving demand environment for GPUs in gaming end markets. Potential catalysts for Nvidia shares in 2020 include positive bias to estimates on continued data center demand improvement, visibility into its 7nm product road map, and the closing of the pending Mellanox acquisition, he added. The analyst has a Buy rating on the shares.

AMD POISED FOR MULTIPLE EXPANSION: 

Meanwhile, Rosenblatt analyst Hans Mosesmann raised his price target for AMD to $65 from $52, citing his belief that the stock is poised for multiple expansion in 2020. The analyst noted that AMD shares are up nearly 147% year-to-date. Nonetheless, he views 2020 as a year in which the company will continue its early momentum in CPU share gains and see “limited competitive threats slowing the momentum” for the upcoming new 7nm mobile Ryzen chip. The analyst added that he likes the setup for a “strong back half of 2020” on the early ramp of new Microsoft (MSFT) and Sony (SNE) game consoles. Mosesmann has a Buy rating on AMD shares.

TOP SEMICONDUCTOR IDEAS FOR 2020: 

Rosenblatt’s Mosesmann ranked his Top 3 semiconductor picks for 2020, with AMD coming at number 1, followed by Micron (MU) and Xilinx (XLNX). His other top ideas for 2020 include “more conservative and consistent” Microchip (MCHP), Monolithic Power (MPWR), and Texas Instruments (TXN). The analyst’s favorite small cap idea is Lattice (LSCC) due to a reinvented organization, new product roadmap, limited competition in small FPGAs, and new edge AI opportunities versus traditional MCU’s.

PRICE ACTION:

In morning trading (Dec 31), shares of Nvidia and AMD have gained about 1% apiece.

Originally Posted on December 31, 2019 – Analysts Raise Nvidia, AMD Targets Ahead of Growth Expected in 2020

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