ADVERTISEMENT

One of the few Wall Street analysts bearish on Nvidia reverses course, saying his call 'did not work out' (NVDA)

Wall Street is bullish on Nvidia but there are some holdouts who think the company's hype is overblown. One such analyst reversed their view of the company.

  • Shares of Nvidia have skyrocketed this year, which has left those betting against the company hurting.
  • One bearish analyst upgraded his outlook on the company and says he got his previous calls wrong.
  • Strong performance in the data center and gaming businesses have been a point of pride for Nvidia.
ADVERTISEMENT

Nvidia has been on a crazy upward burn, gaining 109.69% this year thanks to its strength in artificial intelligence and cryptocurrencies. The meteoric rise has left those bearish on the company in the dust, and on Monday, one of those bears decided enough was enough.

"We have had calls in the past that have not worked out and we are likely going to have calls in the future that may not necessarily work out," Ambrish Srivastava, an analyst at BMO Capital Markets, said in a note to clients. "We have been reluctant to change our view, but now recognize that our Underperform call did not work out, either."

Srivastava raised his price target from $135 to $200, a 48% increase, and upgraded his rating from a sell to a neutral based on strengths in business areas where Srivastava predicted weakness.

ADVERTISEMENT

Srivastava said that he had expected Nvidia's gaming business to slow this year. But, a deal to power Nintendo's breakout Switch console has helped the company outperform Srivastava's expectations. Nvidia's GPU business has gotten a boost from cryptocurrency miners this year too. They have been buying up Nvidia graphics cards in great quantities, hoping to speed up their computers and mine currencies like ethereum faster.

In Nvidia's last earnings report, it reported revenue of $2.653 billion. The data center portion of Nvidia's business, which sells chips and software to be used in developing artificial intelligence applications, was one of the best performing, growing 175% year over year. Companies like Amazon and Google have been strong Nvidia customers as they look to improve their data centers' ability to handle a flood of new AI systems.

"Given what is now perceived as a blue-sky opportunity that the company has in front of itself in AI, we see investors continuing to value the stock at a high premium to the [semiconductor] group," Srivastava said.

Nvidia was down 1.08% trading around $213.88 a share on Monday after Srivastava released his note.

FOLLOW BUSINESS INSIDER AFRICA

Unblock notifications in browser settings.
ADVERTISEMENT

Recommended articles

10 African countries that waste the most food in 2024

10 African countries that waste the most food in 2024

US troop withdrawal from Niger hangs in the balance

US troop withdrawal from Niger hangs in the balance

Detained Binance executives sue Nigerian authorities for human right violation

Detained Binance executives sue Nigerian authorities for human right violation

Nigeria's central bank increases minimum capital base for banks

Nigeria's central bank increases minimum capital base for banks

Sony’s creators convention redefines the creative landscape for content creators

Sony’s creators convention redefines the creative landscape for content creators

Exploring the popularity of progressive jackpot slots in Indonesia

Exploring the popularity of progressive jackpot slots in Indonesia

Egypt, Nigeria, and South Africa ranked as Africa's most polluted countries in new report

Egypt, Nigeria, and South Africa ranked as Africa's most polluted countries in new report

10 African countries with the lowest life expectancy according to the World Bank

10 African countries with the lowest life expectancy according to the World Bank

Kenyan women are more obese than their men - here’s why

Kenyan women are more obese than their men - here’s why

ADVERTISEMENT