Nvidia will likely emerge a winner from a slowdown in “Moore’s Law,” which states the number of transistors on a chip can double every two years while costs can be slashed in half, Bhatti said in the Friday initiation note.
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CPU performance gains are showing slights of stalling given the rise of the heavy computing power that machine learning requires, the analyst said. This works in Nvidia’s favor, as it has shown leadership status in machine learning and high-performance computing end markets since fiscal 2015, when it became the leading supplier of processors for the industry, he said.
Atlantic Equities projects a total addressable market in 2029 for ML and HPC segments of around $50 billion and said Nvidia can control a 45 percent of the market.
The stock has recovered almost 30% from its 52-week low of $124 in late December. The stock has been on solid uptrend from late December along with broader market bounce amid progress in US-China trade deal. However, the stock is still down 45% from its 52-week high of $292.
On February 14th, the company had reported EPS of $0.80 topped a $0.77 consensus, while revenue of $2.21 billion was roughly in line with guidance. Nvidia gave revenue guidance for the current quarter of $2.2 billion, plus or minus 2%, slightly below a $2.32 billion consensus estimate. Nvidia shares were up almost 9% to $168.31 in after-hours trading.
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