Nvidia Shares Move Up On Upbeat Post-Earnings Outlook; Canaccord Adams Ups Rating To Buy From Sell
It’s been an interesting 24 hours for investors in Nvidia (NVDA).
Yesterday, shares of the graphics chip company traded lower heading into the company’s earnings announcement last night; there were concerns about high levels of channel inventory and market share losses to the ATI division of Advanced Micro Devices (AMD).
When the company reported results, the stock initial swooned in after hours trading, dropping more than 8%, as revenue met expectations but profits came up short, as gross margins fell a full 100 basis points below Street estimates. But in the post-earnings conference call (and a subsequent interview with Tech Trader Daily) the company said that it expects July quarter results to show a gross margin rebound of 100 points as it completes a key product transition. The stock quickly recovered most of its initial losses, though it still ended yesterday’s late session with a small loss.
Today, the stock is flashing green: the sense on the Street is that the outlook is strong, and the Nvidia has done a nice job dealing with with the short-term product transition issues.
Bobby Burleson, an analyst at Canaccord Adams, today raised his rating on the stock to Buy from Sell; his price target goes to $26, from $16. His take is that the stock appears undervalued given recent improvements in the PC supply chain and “stability at NVDA manufacturing partners.” Burleson raised his EPS estimate for the July quarter to 38 cents from 35 cents; for the January ‘09 fiscal year, he goes to $1.66, from $1.56.
NVDA today is up 91 cents, or 4.2%, to $22.86.
Upgrade after a miss??
gross margin won’t improve “100 points” — they said it will improve 100 BASIS POINTS.
And Me: Booby had to raise them to a Buy, because the price had long blown thru his imaginary target of 16 to 22, so since he missed, well - why not raise the target to 26??
P&F charts have given a buy signal with a PO of 32. This stock’s momentum is more important than the fundamentals. I am only concerned about technicals and the charts with high probability forcast much higher prices. This was a $38 dollar stock a year ago. The stock got hammered well beyond a needed pullback, but the pullback was overdone.
Double Trouble, Stifel also gave them a double upgrade. sell to buy.
All these forecasts are BS. Pay no attention to these degenerates who claim to know what companies and economies will do. Stock prices don’t even reflect any logical valuation anymore, so even if these imbeciles knew what they were talking about, it wouldn’t have any effect on the price anyway.
Most of these people work for the same banks and brokerage firms who own massive amounts of stock and want it to just keep going up and up and up without any merit.
Tech Trader Daily is a blog on technology investing written from Palo Alto, California by long-time Barron's West Coast Editor Eric J. Savitz. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields.
