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The Zacks Analyst Blog Highlights: Nvidia, Amazon, Microsoft, Alphabet and Micron
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For Immediate Release
Chicago, IL –August 16, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Nvidia (NVDA - Free Report) , Amazon (AMZN - Free Report) , Microsoft (MSFT - Free Report) , Alphabet (GOOGL - Free Report) and Micron (MU - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
Should You Buy Nvidia (NVDA - Free Report) Ahead of Earnings?
Nvidia saw its stock price surge over 1.7% Tuesday after the chipmaker officially unveiled its much-anticipated, eighth-generation GPU architecture. Nvidia’s new Turing line of graphics chips is the company’s “most important innovation in computer graphics in more than a decade,” according to CEO Jensen Huang. But the Turing GPUs won’t help NVDA’s Q2 financial results, so let’s see if the stock is still worth buying ahead of Thursday’s earnings release.
Overview
Nvidia showed off its Turing GPU’s at a conference in Vancouver on Monday after a nearly two-year wait. The company’s Turing line brings ray tracing to real-time graphics, which should help computer and video game graphics appear more lifelike and realistic than ever before due to the ability to trace the path of light as it interacts with objects. “Hybrid rendering will change the industry, opening up amazing possibilities that enhance our lives with more beautiful designs, richer entertainment and more interactive experiences,” Huang said at the conference. “The arrival of real-time ray tracing is the Holy Grail of our industry.”
Nvidia’s announcement clearly has many investors excited. The new graphics cards with Turing technology will be available in the fourth quarter and look poised to be in high demand in both the gaming sector and the quickly growing data center industry. Yet, even without these new chips, Nvidia’s business remains strong despite the drop in demand from cryptocurrency miners as its gaming unit continues to play a major role in the multibillion-dollar industry.
Last quarter the firm’s gaming division soared 68% to reach $1.72 billion, while its total Q1 revenues surged 66% from $1.94 billion in the year-ago period to $3.21 billion. Meanwhile, the company’s ever-growing data center business skyrocketed 71% to reach $701 million. Nvidia boasts data center clients that include giants Amazon, Microsoft and Alphabet — which have all invested heavily in chips that power their new artificial intelligence ventures.
Stock Price Movement
Nvidia has been one of the best-performing stocks over the last three years, with shares of NVDA up roughly 1,000%, which destroys its industry’s 117% climb. More recently, NVDA stock has cooled off a bit, yet it has still climbed over 313% during the last 24 months.
The last year has still been kind to Nvidia, with its stock price up roughly 56%. However, the firm has experienced much more turbulence during the last 12 months.
Valuation
Nvidia’s impressive run hasn’t stretched the company’s valuation picture as much as some might assume, which is a great sign for investors. NVDA is currently trading at 35.7X forward 12-month Zacks Consensus EPS. This does mark a massive premium compared to its industry’s 11.5X average, and looks far more expensive than Micron’s 4.6X.
Investors should be pleased to see that Nvidia stock has traded as high as 57.4X over the last year, with a one-year median of 41.5X. NVDA is currently trading above its year-long low of 32.9X, but its valuation picture is hardly stretched at the moment.
Outlook
Nvidia is projected to see its Q2 revenues jump by just over 39% to hit $3.11 billion, based on our current Zacks Consensus Estimate. Meanwhile, the firm’s gaming unit is projected to soar by over 48% to $1.76 billion, based on our exclusive NFM estimates. On top of that, Nvidia’s data center business is projected to hit $760.6 million, which would represent another impressive 83% climb from the $416 million the company reported in the year-ago period.
At the other end of the income statement, NVDA is expected to see its adjusted quarterly earnings jump 81% to reach $1.83 per share. However, the company’s EPS projection has remained flat over the duration of the quarter, which signals that analysts’ earnings sentiment hasn’t changed in either direction.
Bottom Line
Nvidia is currently a Zacks Rank #3 (Hold) but does rock an “A” grade for Growth in our Style Scores system. Investors should also note that the firm has a great management team that hasn’t seen Nvidia miss quarterly earnings estimates at any point in the last seven years. Plus, with its new, potentially game-changing line of GPUs set to launch soon, now might be time to scoop up Nvidia stock.
Nvidia is set to release its second-quarter financial results after the closing bell on Thursday, August 16.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: Nvidia, Amazon, Microsoft, Alphabet and Micron
For Immediate Release
Chicago, IL –August 16, 2018 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Nvidia (NVDA - Free Report) , Amazon (AMZN - Free Report) , Microsoft (MSFT - Free Report) , Alphabet (GOOGL - Free Report) and Micron (MU - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
Should You Buy Nvidia (NVDA - Free Report) Ahead of Earnings?
Nvidia saw its stock price surge over 1.7% Tuesday after the chipmaker officially unveiled its much-anticipated, eighth-generation GPU architecture. Nvidia’s new Turing line of graphics chips is the company’s “most important innovation in computer graphics in more than a decade,” according to CEO Jensen Huang. But the Turing GPUs won’t help NVDA’s Q2 financial results, so let’s see if the stock is still worth buying ahead of Thursday’s earnings release.
Overview
Nvidia showed off its Turing GPU’s at a conference in Vancouver on Monday after a nearly two-year wait. The company’s Turing line brings ray tracing to real-time graphics, which should help computer and video game graphics appear more lifelike and realistic than ever before due to the ability to trace the path of light as it interacts with objects. “Hybrid rendering will change the industry, opening up amazing possibilities that enhance our lives with more beautiful designs, richer entertainment and more interactive experiences,” Huang said at the conference. “The arrival of real-time ray tracing is the Holy Grail of our industry.”
Nvidia’s announcement clearly has many investors excited. The new graphics cards with Turing technology will be available in the fourth quarter and look poised to be in high demand in both the gaming sector and the quickly growing data center industry. Yet, even without these new chips, Nvidia’s business remains strong despite the drop in demand from cryptocurrency miners as its gaming unit continues to play a major role in the multibillion-dollar industry.
Last quarter the firm’s gaming division soared 68% to reach $1.72 billion, while its total Q1 revenues surged 66% from $1.94 billion in the year-ago period to $3.21 billion. Meanwhile, the company’s ever-growing data center business skyrocketed 71% to reach $701 million. Nvidia boasts data center clients that include giants Amazon, Microsoft and Alphabet — which have all invested heavily in chips that power their new artificial intelligence ventures.
Stock Price Movement
Nvidia has been one of the best-performing stocks over the last three years, with shares of NVDA up roughly 1,000%, which destroys its industry’s 117% climb. More recently, NVDA stock has cooled off a bit, yet it has still climbed over 313% during the last 24 months.
The last year has still been kind to Nvidia, with its stock price up roughly 56%. However, the firm has experienced much more turbulence during the last 12 months.
Valuation
Nvidia’s impressive run hasn’t stretched the company’s valuation picture as much as some might assume, which is a great sign for investors. NVDA is currently trading at 35.7X forward 12-month Zacks Consensus EPS. This does mark a massive premium compared to its industry’s 11.5X average, and looks far more expensive than Micron’s 4.6X.
Investors should be pleased to see that Nvidia stock has traded as high as 57.4X over the last year, with a one-year median of 41.5X. NVDA is currently trading above its year-long low of 32.9X, but its valuation picture is hardly stretched at the moment.
Outlook
Nvidia is projected to see its Q2 revenues jump by just over 39% to hit $3.11 billion, based on our current Zacks Consensus Estimate. Meanwhile, the firm’s gaming unit is projected to soar by over 48% to $1.76 billion, based on our exclusive NFM estimates. On top of that, Nvidia’s data center business is projected to hit $760.6 million, which would represent another impressive 83% climb from the $416 million the company reported in the year-ago period.
At the other end of the income statement, NVDA is expected to see its adjusted quarterly earnings jump 81% to reach $1.83 per share. However, the company’s EPS projection has remained flat over the duration of the quarter, which signals that analysts’ earnings sentiment hasn’t changed in either direction.
Bottom Line
Nvidia is currently a Zacks Rank #3 (Hold) but does rock an “A” grade for Growth in our Style Scores system. Investors should also note that the firm has a great management team that hasn’t seen Nvidia miss quarterly earnings estimates at any point in the last seven years. Plus, with its new, potentially game-changing line of GPUs set to launch soon, now might be time to scoop up Nvidia stock.
Nvidia is set to release its second-quarter financial results after the closing bell on Thursday, August 16.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.