05-22-2017, 07:25 AM
Hari, reiterating a Buy rating, writes that "Given increased confidence in the growth trajectory and its sustainability,” the stock now deserves a multiple o f 31 times projected earnings for 2019 (fiscal year ending January), versus the 25 times Hari had previously used. Hari notes this is “not necessarily” a valuation increase, because the already trades for 37.9 times calendar 2018 estimates.
Among details of the presentation, Hari was particularly pleased that Nvidia discussed how its chips for machine learning in data centers could be used not just for “training” but for “inferencing”: "the 2020 TAM forecasts provided by the company (i.e., ~$30bn for HPC/training/inferencing or nearly 8x our FY20 Datacenter revenue forecast of $3.6bn),” writes Hari. “We note that the consensus view among investors ahead of the Investor Day was 'while NVDA has a strong foothold in the training market, they are behind the curve relative to CPUs/FPGAs/ASICs in inference,’” writes Hari..
Nvidia: Take Advantage of Short-Sighted Investor Worries, Says Goldman - Barron's