Tag Archives: analyst comment

Business

Ray Dalio says watch out for rates reaching this level, because Wall Street stocks will take a 20% hit

Leave a comment

After that CPI shock earlier in the week, Wall Street is fielding a fresh batch of data on Thursday, with the headline retail sales number coming in stronger than expected. And a disastrous rail strike may be inverted.

But there’s no cheering up billionaire investor and hedge-fund manager Ray Dalio who in our call of the day asserts the Fed has no choice but to keep driving up interest rates, at a high price to stocks.

And he’s putting some fairly precise guesswork out there. “I estimate that a rise in rates from where they are to about 4.5% will produce about a 20% negative impact on equity prices,” Dalio said in a LinkedIn post dated Tuesday.

Some are forecasting the Fed could hike interest rates by 100 basis points next week, a move not seen since the likewise inflationary 80s. The central bank’s short-term rate hovers between 2.25% to 2.5%, but Nomura, for one, sees that rate headed to 4.75% by 2023.

But Dalio thinks interest rates could even reach the higher end of a 4.5%-to-6% range. “This will bring private sector credit growth down, which will bring private sector spending, and hence the economy down with it,” he says.

Behind this prediction is the Bridgewater Associates founder belief that the market is severely underestimating where inflation will end up — at 2.6% over the next 10 years versus what he sees as 4.5% to 5% in the medium term, barring shocks.

Read: Why a single U.S. inflation report roiled global financial markets — and what comes next

As for what happens when people start losing money in the markets — the so-called “wealth effect” — he expects less spending as they and their lenders grow more cautious.

“The upshot is that it looks likely to me that the inflation rate will stay significantly above what people and the Fed want it to be (while the year-over-year inflation rate will fall), that interest rates will go up, that other markets will go down, and that the economy will be weaker than expected, and that is without consideration given to the worsening trends in internal and external conflicts and their effects.”

The markets

Stock futures
ES00,
-0.25%

YM00,
+0.02%

NQ00,
-0.48%
are slightly lower post data, as Treasury yields
TMUBMUSD10Y,
3.437%

TMUBMUSD02Y,
3.852%
keep climbinging and the dollar
DXY,
-0.10%
firms up.

Oil prices
CL.1,
-1.63%
are lower, along with gold
GC00,
-0.83%.
China stocks
SHCOMP,
-1.16%

HSI,
+0.44%
slipped after the country’s central bank left rates unchanged. European natural-gas prices
GWM00,
+4.13%
are on the rise again. Bitcoin
BTCUSD,
+0.64%
is trading at just over $20,000.

The buzz

Shares of Union Pacific
UNP,
-3.69%,
Norfolk Southern 
NSC,
-2.16%
and CSX
CSX,
-1.05%
 are rallying in premarket after the White House said it has reached a tentative railway agreement with unions. No deal by Friday would mean strikes and havoc for supply chains, grain markets and even the coming holidays. Read more here.

August retail sales rose a stronger-than-expected 0.3% as Americans spent on new cars while weekly jobless claims came in lower for a fifth-straight week and import prices dropped 1%. Elsewhere, the Empire State manufacturing index perked up on the heels of a deep negative reading, but the Philly Fed factory index worsened. Industrial production and business inventories are still to come.

Adobe shares
ADBE,
+0.85%
are dropping after a report the software company is mulling a $20 billion deal to buy graphic design startup Figma .

Vitalik Buterin, one of the co-founders of Ethereum, says the so-called “merge” is done, meaning the birth of a more environmentally friendly crypto. Ethereum
ETHUSD,
-1.22%
is up just a little right now.

A new lawsuit claims Tesla
TSLA,
+3.59%
has made false promises over Autopilot and Full Self Driving features. And move over Tesla, Apple
AAPL,
+0.96%
is now Wall Street’s biggest short bet.

Ericsson
ERIC,
-3.32%

ERIC.A,
-1.78%

ERIC.B,
-3.34%
is dropping after a double downgrade at Credit Suisse, who cited inflationary headwinds. Analysts lifted Nokia
NOKIA,
-0.51%

NOK,
-0.40%
to outperform, though the stock is barely moving.

Cathie Wood’s Ark Investment Management went on a dip-buying spree after Tuesday’s market meltdown, scooping up chiefly Roku
ROKU,
+0.44%.

Opinion: Pinterest never considered itself a social network. Until now.

Patagonia billionaire Yvon Chouinard is donating his entire company — worth $3 billion — to the climate fight.

Best of the web

No U.S. shale rescue for Europe.

Turkey finds an extra $24.4 billion laying around.

Queue to pay respects to Queen is 2.6 miles long and counting.

The tickers

These were the top-searched tickers on MarketWatch as of 6 a.m. Eastern Time:

Ticker Security name
TSLA,
+3.59% 		Tesla
GME,
+1.01% 		GameStop
AMC,
+1.95% 		AMC Entertainment
BBBY,
+4.66% 		Bed Bath & Beyond
HKD,
+311.78% 		AMTD Digital
NIO,
-0.14% 		NIO
AAPL,
+0.96% 		Apple
APE,
+0.94% 		AMC Entertainment preferred shares
AMZN,
+1.36% 		Amazon
NVDA,
-0.02% 		Nvidia
Random reads

Scientists try to teach robots comedic timing

Sausage, mozzarella, batter. Meet South Korea’s hot dog.

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

Read original article here

Business

The stock market typically bottoms before the end of a Fed rate-hike cycle. Here’s how to make that bet pay off.

Leave a comment

A lot of money can be made betting on when the Federal Reserve will “pivot” — that is, take its foot at least partially off the rate-hike gas pedal. Yet a lot of money can also be lost, as we saw on August 26 when the Dow Jones Industrial Average
DJIA,
-0.57%
lost more than 1,000 points after Fed Chair Jerome Powell dashed hopes that the Fed’s pivot had begun in July.

So it’s helpful to review past rate-hike cycles to see how investors fared when trying to anticipate when those cycles came to an end.

To do that, I focused on the six distinct rate-hike cycles since the Fed began specifically targeting the Fed funds rate. The table below reports how many days prior to the end of those cycles that the stock market hit its low. (Specifically, I focused on a six-month window prior to the end of each cycle, and determined when within that window the S&P 500
SPX,
-0.67%
hit its low.)

Start of rate-hike cycle End of rate hike cycle Days in advance of cycle’s end that S&P 500 hit its low S&P 500’s gain from low to end of rate hike cycle S&P 500’s gain 3 months after market’s low S&P 500’s gain 6 months after market’s low S&P 500’s gain 12 months after market’s low
30-Mar-83 9-Aug-84 16 +12.0% +13.2% +18.7% +30.3%
4-Jan-87 24-Feb-89 176 +11.1% +5.5% +12.7% +36.0%
3-Feb-94 1-Feb-95 55 +5.6% +9.9% +18.5% +38.3%
29-Jun-99 16-May-00 81 +10.0% +3.6% +13.1% -4.9%
29-Jun-04 29-Jun-06 16 +4.0% +7.3% +15.5% +24.5%
15-Dec-15 20-Dec-18 0 +0.0% +13.4% +19.4% +30.6%
  AVERAGE 57 +7.1% +8.8% +16.3% +25.8%

As you can see, the market hit its low an average of 57 days prior to the end of the Fed’s rate-hike cycle — about two months. Yet notice also that there is quite a range, from no lead time at one extreme to almost the entire six-month window on which I focused. Given that it’s hard to know when the Fed will actually begin to pivot, this wide range illustrates the uncertainty and risk associated with trying to reinvest in stocks in anticipation of a pivot.

Nevertheless, the table also shows that there are hefty gains to be had if you get it even partially right. For example, the S&P 500 gained an average of 7.1% over the period between the market’s pre-pivot low and the actual end of the rate-hike cycle. That’s an impressive return for a two-month period. Furthermore, the average gain over the six months following the pre-pivot low is a strong 16.3%, and over the 12 months following that low it is 25.8%.

How should you play this high-risk/high-reward situation? One way is to dollar-cost average up to whatever is your desired equity exposure. For example, you could divide into five tranches the total amount you want to eventually put back into the stock market, and invest each tranche in equities at the end of the next five calendar quarters. If you followed this approach — and it is just one of many possible ones — you’d be back to your target equity exposure by the beginning of 2024.

Such an approach won’t get you into stocks at the exact pre-pivot low, but hoping for that is a delusion. Yet the approach should get you an average buy-in price that is better than waiting. It should also protect you from days like August 26, when the market punished those who bet that the Fed had already started to pivot.

Mark Hulbert is a regular contributor to MarketWatch. His Hulbert Ratings tracks investment newsletters that pay a flat fee to be audited. He can be reached at mark@hulbertratings.com

More: Learn how to shake up your financial routine at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. Join Carrie Schwab, president of the Charles Schwab Foundation.

Read original article here

Business

AT&T earnings were ‘actually good’ despite stock selloff, says analyst

Leave a comment

AT&T Inc.’s shares fell sharply Thursday after the telecommunications giant cut its free-cash-flow forecast for the year, but one analyst said the latest report wasn’t all bad.

In fact, LightShed Partners analyst Walt Piecyk titled his research note: “AT&T’s Q2 Was Actually Good. Here’s Why.”

Admittedly, AT&T’s
T,
-7.62%
management team didn’t win points from Piecyk for its handling of cash-flow forecasting over the past few months. Piecyk recalled flagging issues with AT&T’s older free-cash forecast back in March, namely a “liberal use of rounding, aversion to simply stating a cash tax estimate for presumably political reasons, and ultimately the use of working capital and DirecTV distributions in their free-cash-flow presentation.”

AT&T said Thursday that various trends contributed to the lowered forecast, including slower customer payment times and higher-than-expected cash expenses related to its own device purchases from suppliers.

“It’s startling that the stock would sell off this steeply on working capital, but management is largely to blame,” Piecyk wrote. “Free-cash-flow guidance should not be this complex and investors shouldn’t include ephemeral working capital benefits in their calculations.”

Elsewhere, however, he saw positives in the report. AT&T’s free-cash-flow metric is important to investors because the company pays a large dividend, but Piecyk doesn’t think that the company will need to cut its dividend any more.

“Its core business is performing well and the 5G capex cycle should be winding down,” he wrote. “In 2023, we believe AT&T can generate over $12 billion of free-cash flow. The full-year benefit of the dividend cut means that $12 billion covers ~$8.2 billion of expected dividend payments,” before taking into account working-capital impacts or about $3 billion in anticipated DirecTV distributions.

Piecyk also had an upbeat view on the company’s wireless performance, especially in light of investor debate about the company’s pricing and promotional strategies.

“The increased pricing on its rate plans did not spike churn and helped deliver post-paid phone ARPU [average revenue per user] growth for the first time in over two years,” he wrote. “This also sends a signal to the wireless industry that there is pricing power in this market.”

Piecyk sees additional room for the company to grow ARPU as the year progresses.

He acknowledged that “[i]nvestors are understandably concerned that AT&T is buying revenue growth with handset subsidies to both new and existing subscribers” but noted that the company was able to grow wireless earnings before interest, taxes, depreciation, and amortization (Ebitda) in the latest quarter. In addition, the company’s upgrade rate fell relative to a year earlier, suggesting that the upgrade cycle is stretching out.

While AT&T is feeling some pain in its business wireline business, Piecyk was impressed by the performance of the company’s fiber business, with net adds up 25% relative to a year before. “This further validates our industry assumptions of target market share for fiber overbuilders and the increased share that can be obtained in legacy markets,” he wrote.

Overall, Piecyk sees opportunities for AT&T moving forward, especially given what the latest numbers indicated about pricing actions. “We continue to believe wireless operators can increase price and cut costs,” he wrote, including through a potential curtailing of device subsidies.

Piecyk rates the stock a buy with a $26 target price.

Read original article here

Technology

The pandemic boom in videogames is expected to disappear in 2022

Leave a comment

While the videogame industry continued to enjoy a pandemic boost in 2021, investors and analysts expect less in 2022, as continued semiconductor shortages and game delays combine with expectations that many will turn off the PlayStation and leave the house.

Chip shortages have especially been a pain for makers of videogame consoles, such as Sony Group Corp.’s
SONY,
-0.62%

6758,
-0.55%
PlayStation, Microsoft Corp.’s
MSFT,
+0.21%
Xbox and Nintendo Co.’s
7974,
-1.73%
Switch consoles. Lewis Ward, gaming research director at IDC, expects that part of the videogame industry to be a drag on growth: IDC expects console/TV spending to decline nearly 6%, to $62.75 billion in 2022.

Overall, Ward estimates worldwide gaming revenue will rise 11% to $251.39 billion in 2021, compared with 2020’s surge of 24% to $226.84 billion. While 11% is still pretty healthy growth, Ward also expects a more “dramatic” flattening in 2022, when he forecasts revenue of $256.43 billion, or only 2% growth.

A lot of that expected flattening has to do with the assumption that the worst of COVID-19 has passed, and that even with variants like delta and omicron popping up, stay-at-home conditions will not go back to what was seen in 2020 and early 2021.

“In my models and discussions with folks, we’re certainly thinking that life will return to something more normal, especially in countries where the vaccination rates are over 50%, 60%, 70%, 80% in some cases,” Ward told MarketWatch in an interview.

Also read: For the videogame industry to grow, it needs to first grow up

Ward said he expects “that there will be a return to normalcy and a substantial minority of the people that were first-time gamers go back to being non-gamers, and a substantial minority of the people who became much more intensive gamers will go back to spending their time and money doing other pursuits beyond gaming, that there will be something of a slowdown inherent in that.”

Games themselves will also be a big issue, as many major releases have faced delays, with no publisher wanting to experience the same fan and media heat as CD Projekt SA
CDR,
-0.20%
did after its bug-plagued 2020 release of “Cyberpunk 2077.” Publishers are more likely to keep updating their older games with fresh downloadable content to keep making money from previously successful releases.

“I think the biggest games in 2022 are going to be the biggest games from 2021, that were the biggest games from 2020,” NPD Group analyst Mat Piscatella said, citing examples like Epic Games’ “Fortnite,” Roblox Inc.’s
RBLX,
-1.42%
platform, Activision Blizzard Inc.’s
ATVI,
+0.73%
“Call of Duty” franchise, and Mojang Studios’ “Minecraft,” which is owned by Microsoft.

“Those are the games that are going to continue to be the biggest because of that persistent content flow they have, and the big are going to stay big — now, trying to break into that tier is becoming exceptionally difficult,” Piscatella said.

Expectations for a dramatic slowdown were apparent on Wall Street in 2021. With two trading sessions left in 2021, Activision Blizzard shares were down 28% on the year, Electronic Arts Inc.
EA,
-0.25%
is down 6%, Take-Two Interactive Software Inc. 
TTWO,
+0.51%
 shares are off by 12%, Zynga Inc.’s
ZNGA,
-1.72%
stock is down 34%, and Unity Software Inc.
U,
+0.72%
shares are down 13%. In comparison, the iShares Expanded Tech-Software Sector ETF
IGV,
-0.14%
has risen 11%, and the S&P 500 index
SPX,
+0.14%
has gained 28%.

For companies that went public in 2021, things were a bit different: Shares of Roblox are up 126% from their direct listing price of $45, and AppLovin Inc.
APP,
-2.05%
shares are 17% above their $80 IPO pricing. Shares of Israeli mobile-game developer Playtika Holding Inc.
PLTK,
-3.97%,
however, are 33% off their $27 IPO pricing.

Console makers and buyers had it tough in 2021

Expectations for a shrinking console market come from product cycles and chip shortages. Ward said the current version of Nintendo’s popular Switch console was “getting long in the tooth” and that the company was pulling back shipments in anticipation of a new iteration in 2023.

Ward’s console category includes hardware-bundle spending, while PC and mobile are software/service spending only, and TV refers to micro-console game spending like Alphabet Inc.’s
GOOG,
+0.04%

GOOGL,
-0.02%
Stadia Pro and Nvidia Corp.’s
NVDA,
-1.06%
Shield Android.

Even with strong consumer demand, Sony pulled back shipments of its PlayStation consoles “by about a million units” because of production challenges, and “even though they haven’t said it,” Microsoft has run into similar challenges with the Xbox, Ward said. Microsoft showed its hand by having to resort to using developer models of the Xbox for a recent tournament because it couldn’t find enough consumer versions.

Ward said that console makers are not only contending with chip shortages, but then they have to deal with the logistics of getting the parts to the factories, and then getting finished products out of China to consumers as global supply-chain problems triggered by COVID-19 remain a problem. So, Ward said, the pullback in numbers reflects the console makers’ “own expectations of where they’ll be relative to where they’d thought they would be a few quarters ago.”

Looking at the larger chip picture, other analysts expect supply-chain problems to ease in 2022, but not by much.

“The overall supply landscape remains constrained, but we are generally seeing signs of easing,” Benchmark analyst David Williams said in a recent note. “Demand remains resilient despite inflationary pressures and well-telegraphed shortages across most end markets.”

“Although many areas of the supply chain have improved, we think the prior surge in commodity and transportation costs have not been fully worked through to end consumers, which may be a headwind to consumption in the new year,” Williams said.

Evercore ISI analyst C.J. Muse looks at it from the demand side and fundamentals in the industry, and said in a recent note “if you think the wall of worry was difficult in 2021, just wait.” Muse thinks a correction in the industry will more likely come in 2023 than 2022.

“On a secular basis, the semiconductor story is robust, with COVID accelerating the digitization of nearly every industry vertical,” Muse said. “Sprinkle in product cycles including AI/ML, data center/networking infrastructure, the Metaverse, 5G, continued broad-based recovery across automotive/industrial, and there is much to like in Semi Land with a clear vision for silicon intensity rising as a % of GDP.”

Bugs or delay? Both result in angry fans

Game development during COVID-19 has seen a rise in a common dilemma: If it’s taking longer than expected to develop a game by its announced release date, do you release it on time and risk it having bugs, or do you delay the release — sometimes repeatedly — to ensure it meets the highest quality-control standards?

Most publishers have chosen to go the latter route of late, after the “Cyberpunk 2077” debacle, which forced distributors like Sony to offer full refunds due to low quality and a lack of backwards compatibility with previous-generation consoles.

Then you have the possibility of the worst of both worlds: A delayed game that is not received well when it does hit. EA’s “Battlefield 2042″ was not only delayed by a month in its release but it became regarded as one of the worst-reviewed games in the history of online game site Steam, with gamers posting online videos showing bugs in the game.

Activision Blizzard said in November it would be delaying the release of two of its highly anticipated games, and Take-Two recently suffered a rough launch of its “Grand Theft Auto: The Trilogy – Definitive Edition.” 

While IDC’s Ward said he thinks delays and bugs are “game specific” — meaning some games are more difficult than others to develop — International Game Developers Association Executive Director Renee Gittins said COVID-19 was the biggest headwind for developers.

“Particularly with the pandemic, we’ve seen a lot of game studios struggle with the transition to remote work,” Gittins said. “When you’re used to working in an open-office environment, where you have a lot of passive communication between teams and you can really more easily collaborate by have those informal meetings in person, being forced into a remote-work environment hurts that communication a lot.”

“There’s a lot of difficulties that game developers normally face and that’s only being exacerbated by this remote-work environment that many have been forced into by the COVID-19 pandemic,” Gittens said.

Videogames to give way to the metaverse?

With new games proving harder to produce as older games continue to rake in cash, many are looking to the “metaverse” as the future of the industry. The concept — a virtual world in which users can build and offer their own experiences — is similar to what Roblox offers, and could offer the industry a way to not rely so heavily on single-game launches, Ward said.

“If the platform does well, you can monetize that for a long time, more than any single game,” he said.

A recent Goldman Sachs report put forward Roblox, Facebook parent company Meta Platforms Inc.
FB,
-0.95%,
and Snap Inc.
SNAP,
-1.36%
as key buy-rated stocks exposed to the multi-year metaverse theme.

“When you think about a traditional game developer/publisher versus companies that are in the metaverse space — and certainly Niantic is trying to go there — I would say Facebook is trying to go there, they’re a platform company,” Ward said.

“And I would say a company like Roblox may not be talking about the metaverse, but I think they’re closer to that than many other game developers and publishers in the sense that they want to be selling picks and shovels and Levis to the actual miners who will go out and make those experiences,” the IDC analyst said.

Read: Amazon videogame exec on the success of ‘New World’ and why everyone is chasing Roblox

Privately held Niantic Inc. “seems to be inching away from ‘Pokemon Go’ as the main vehicle for monetization,” Ward said, and now they’re licensing their Lightship AR development kit “to become a platform company.” Niantic recently raised $300 million and is now worth $8.7 billion, according to Crunchbase.

Expanding game franchises to multiple platforms is also a big trend to look for, Piscatella said, a trend best exemplified by “Call of Duty,” which can be played on PC, console, tablets and phones.

One of those cross-platform categories includes free-to-play games, and the industry is finding better ways to make money off those. It used to be that free-to-play games would have a word from their sponsor, or have video “commercials”: Now developers have found a tweak to make that more fun for the player and more profitable for the sponsor.

Video advertising in games can either be unrewarded — in which a player is interrupted with an ad during game play and can skip it after a few seconds, or in some cases, has no choice but to let the whole ad run — or rewarded, where a player is asked if they want to watch an ad, and they’ll be rewarded with some amount of in-game resources.

Back in August, Zynga highlighted that their “watch to earn” ads were a major revenue driver, while AppLovin, which went public in April, not only makes marketing, monetization and analytics software for developers to grow their businesses, but also owns a portfolio of more than 200 free-to-play mobile games.

When it comes to rewarded ads, “more people like them than dislike them,” IDC’s Ward said. “This ad format is something that gamers actually like versus regular video ads, which are strongly negative.”

Read original article here

Business

Nvidia stock jumps as analysts say data-center growth ‘has some room to run’

Leave a comment

Nvidia Corp. shares rallied Thursday as more than half the analysts who cover the chip maker hiked their price targets following the company’s record quarter and forecast for more new highs based on data-center gains.

Nvidia
NVDA,
+6.13%
shares rallied more than 7% in morning trading to hit an intraday high of $204.95, while the PHLX Semiconductor Index
SOX,
+1.20%
gained more than 1%, and the S&P 500 index
SPX,
+0.32%
gained 0.4%. Nvidia shares last closed at a split-adjusted record high of $206.99 back on July 6, and are up 68% over the past 12 months.

For more on today’s market action, see Market Snapshot

Nvidia forecast revenue of $6.66 billion to $6.94 billion Wednesday, above Wall Street estimates at the time, and said that the “lion’s share” of the $500 million increase will come from data-center sales. That follows new records for total, gaming and data-center revenues that Nvidia reported for the quarter.

What many analysts picked up on is that demand for graphics processing units (GPUs) for cryptocurrency mining didn’t factor that much into the outlook. That came as a relief to analysts, who noted a lower crypto risk compared with 2018 when a fall in cryptocurrency values prompted many miners to sell their gaming card-powered rigs, flooding the market with second-hand cards.

Full earnings coverage: Nvidia reports record data-center and gaming revenue, but supply constraints still a concern

Nvidia broke out sales of its Cryptocurrency Mining Processors, or CMPs, which are intended to divert mining demand away from GPUs made for gamers and not expected to be material in revenue gains.

Data-center sales took up much more of the attention from analysts, however. Bernstein analyst Stacy Rasgon, who has an outperform rating on the stock and raised his price target to a $230 from $180, said that while “the company is having absolutely no trouble continuing to crush gaming,” Nvidia’s data-center story “still feels like it has some room to run.”

“The data-center story is really coming into its own now, with a sizable inflection in the near term and with prospect for the segment to equal, and potentially exceed, gaming in the not-too-distant future,” Rasgon said.

For more: Nvidia’s ARM acquisition is stalled, and there’s a deadline with more than a billion dollars at stake

Evercore ISI analyst C.J. Muse, who has an outperform rating and a $250 price target, called data-center sales a “key for the stock.”

“Data Center revenues were guided to accelerate in 3Q off a very strong comp based on strength across hyperscale and vertical customers, training and inference applications, and compute and networking technologies – the democratization of AI workloads continues to be a front and center theme here, and one we see Nvidia driving and benefiting from over for the foreseeable future,” Muse said.

Cowen analyst Matthew Ramsay, who has an outperform rating and raised his price target to $220.00 from $176.25, said that the data-center acceleration was “the most important takeaway” from the earnings call.

“We expect sustainable data-center and gaming product cycles that should drive >50%+ organic growth for the company in F’2022,” Ramsay said.

Jefferies analyst Mark Lipacis, who has a buy rating and raised his price target to $223 from $214, addressed the lower risk of another crypto-mining debacle.

Read: Crypto is reshaping the world economy, 50 years after Nixon ended the dollar’s peg to gold. Here’s how some are playing it

“We think crypto-miners are 1/10th the gaming GPU sales vs 2018,” Lipacis said. “We continue to believe the risk of a crypto-driven gaming bust is low, and expect Nvidia’s ecosystem moat and increasing software revenues to lead to additional upside surprises.”

Of the 41 analysts who cover Nvidia, 34 have buy ratings, five have hold ratings, and two have sell ratings. Of those, at least 24 analysts hiked their price targets in response to the earnings and one lowered their target, according to FactSet. That resulted in an average price target of $219.23, up from a previous $204.24.

Read original article here