Nvidia Investor Day: What It Means for the Stock

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Nvidia

kicks off its investor day at 10 a.m. Pacific time on Tuesday, following a follow a keynote speech from CEO Jensen Huang.

Analysts predict the chip maker will discuss new products and business opportunities, while providing updates on its cash-use plans.

After a pullback in early 2022, shares of Nvidia (ticker: NVDA) have risen roughly 14% in the past month, but they’re still down 9% year to date. The stock was up 1% to $267.55 in Monday trading as the firm kicked off GTC, its flagship technical conference, but was down 0.2% in premarket trading Tuesday.

Bernstein analyst Stacy Rasgon wrote in a note to clients Monday that the firm has been hinting at a meaningful product announcement. He thinks the firm’s schedule of presentations suggests updates on its datacenter, gaming, automotive, and Omniverse offerings.

Rasgon, who rates Nvidia at Outperform with a $325 price target, will be listening for updates on the company’s view of its datacenter total addressable market—which could be materially higher than in the past—as well as further updates on any moves in the Arm ecosystem after its deal for the firm collapsed due to regulatory challenges. He’ll also be listening for details on next-gen gaming products and new additions to its automotive road map. He’s hopeful the firm will share more concrete expectations on its software opportunities.

“We would also be listening for anything on near-term supply, gross margin drivers, spending plans, and thoughts on capital allocation. Thoughts on the forthcoming transition to proof-of-stake and potential impact (or not) on gaming/ crypto would be welcome,” he added.

BofA Global Research analysts Vivek Arya, Jamie Zakalik and Blake Friedman wrote Monday that they have high expectations for Nvidia’s analyst day.

They anticipate the company will give updates on chips and the size of its data center business’ market opportunity. They expect details on how the company can boost revenue from subscription software offerings. And they expect an update on cash use, with the potential for more stock buybacks following the Arm deal’s collapse.

The analysts at BofA have a Buy rating and a $375 price objective, calling Nvidia a top sector pick ahead of the analyst day. They point to 47%-plus earnings before interest and taxes, or Ebit, margins and 25% to 30%-plus sales growth, and think Nvidia is growing faster and more profitable than established software companies.

They’re not alone—the stock has plenty of bullish analysts, given 80% of the 46 analysts listed on FactSet rate it at Buy or an equivalent, according to FactSet. The mean price target of $339.92 implies nearly 28% upside from recent levels.

Write to Connor Smith at [email protected]