Nvidia Shares Fall As Analyst ‘Fussy’ Data Center Releases Record Earnings Report


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Shares of Nvidia Corp. fell on Thursday after the chipmaker’s strong results and outlook met with some pushback from analysts about the company’s data center business. Late on Wednesday, Nvidia NVDA, -7.20% reported quarterly sales topping the $ 5 billion mark for the first time in record game card sales and data center sales which, while up 97% over from the previous year, they remained unchanged sequentially, equaling all-time highs for the last quarter. At least 17 analysts raised their price targets in response to the results, according to FactSet, but they also found flaws in the report, especially in the results and forecast for the data center segment.

“Nitpick if you like,” Cowen analyst Matthew Ramsay said in a note, referring to Nvidia’s data center outlook in the face of high expectations. “In our opinion, looking at the bright side of the data center is warranted as it remains Nvidia’s largest long-term growth vertical, but it also distracts from the very strong F1Q22 gaming guidance that implies a fourth consecutive quarter of 65% + YoY growth, “Ramsay said. He expects Nvidia’s auto chip sales to be the next catalyst for the company amid a shortage in the auto industry. Ramsay has a top performance rating and a $ 665 price target. Read: The global chip shortage is expected to last into next year, and that’s good news for Susquehanna semiconductor stocks Financial analyst Christopher Rolland, who has a positive rating and a price target of $ 700, it said that Nvidia’s results and guidance had to be flawless but they were “close.” ““ All eyes (as always) were on the data center, and the guide may not be impressive enough for everyone, ”Rolland said.“ That said, we consider the DC guide to be ‘in the ballpark ‘and we remind investors that the segment can be extremely uneven. “Evercore ISI analyst CJ Muse, who has a superior performance rating and a price target of $ 675, said that Nvidia remains his main growth idea. on chips, but still noted that the data center is a disappointment. “While the results and guidance aligned, if not better, than buyers’ expectations, the outlook for the important data center business disappointed in the margin, “said Muse. Don’t Miss: Nvidia’s Boom Sounds Familiar, But CFO Says ‘Feels Very Different’ Jefferies Analyst Mark Lipacis, Who Has a Buy Rating and Price Target of $ 680 , said a Investor pullback due to flat data center sales presents a buying opportunity as it did in late 2018. “We note that data center spending on processors has recently been exhibiting periods of growth above the line of business. trend followed by periods of digestion, and that the data center is now in a period of digestion, ”said Lipacis. Nvidia shares fell more than 5% in the morning session to $ 547.27, while the PHLX Semiconductor Index SOX, -4.87% lost more than 3%. The S&P 500 SPX Index, -2.11% and the Nasdaq Composite Index COMP, -3.08% declined more than 1%. Nvidia shares closed at a record $ 613.21 on February 16 and have more than doubled in the last 12 months. Of the 39 analysts covering Nvidia, 30 have buy ratings on the stock, seven have hold ratings and two have sell ratings, according to FactSet. The stock‘s average target price rose to $ 628.22 from Thursday, $ 613.21, according to FactSet data.