As the only remaining major independent player in the market for Graphic Processing Units (GPUs) used in PCs, NVIDIA (NVDA) is well positioned to benefit from increased graphics requirements with strong momentum in its GeForce products. NVIDIA reported better-than-expected Q4 results and is forecasting sales in Q109 to be better than seasonal.
However, cost-related issues with the new GeForce 8800 GT have taken a toll on margins, which should continue for a few quarters. We remain positive on NVIDIA shares and maintain a Hold rating with a new six-month price target of $28.50.
With slowing spending growth on technology expected, we maintain a Hold rating on NVIDIA shares with a new six-month price target of $28.50. Our new six-month price target of $28.50 represents a multiple of 18.8x our fiscal 2009 EPS estimate and 3.2x our fiscal 2009 revenue estimate. Although above the industry mean, we believe the stock can achieve this due to its industry leading position.
Read the full analyst report on NVDA.
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