Nvidia Analysis

Edited by Sanjay Pandey & Vani Rao

Equity ResearchNVIDIA Corp. (NYSE: NVDA), traditionally known as a graphics chip-focused company, has been making headlines in the Mobile and Tablet segments in the recent past. Globally, the market is witnessing a trend of consumers migrating from Personal Computers (PCs) to tablets and smartphones. This shift can be attributed to various factors including sophisticated technology and portability. To make the most of this transition, NVIDIA has geared up its ‘System-on-a-Chip’ (SoC) division. The company has taken several initiatives to make an impact in the Mobile Processor market. One such attempt was made by NVIDIA’s forerunner Tegra 3. However, this launch elicited a lukewarm response from the market. Tegra 3 failed to compete against Qualcomm’s quad-core Snapdragon S4, making it difficult for NVIDIA to make an impact in the Mobile and Tablet market. With the launch of Tegra 4, claimed to be the world’s fastest processor, NVIDIA is looking to emerge as the market leader in the Mobile Processor market. The success of the Tegra 4 processor is expected to boost the company’s growth in the near future.


NVIDIA has given a guidance of $1.06 billion in Q4 of FY2014. Bloomberg estimated revenue at $1.05 billion for Q4 of FY2014 more or less in line with company guidance. The company is expecting a strong sequential growth in the Tegra Processor segment. Based on Non-GAAP EPS estimates (Bloomberg) of $0.86 for FY2015, and price multiple of 19x for NVIDIA, we expect the stock to trade around $17 by the end of 2014.

Estimated Revenue
Source Bloomberg
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NVIDIA Corporation

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