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HomeMarketNvidia Is a Top Pick For Next Year, Needham Says. Here’s Why.

Nvidia Is a Top Pick For Next Year, Needham Says. Here’s Why.

Nvidia shares have declined about 44% this year. (Photo by Justin Sullivan/Getty Images)

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has been selected as one of Needham’s top picks for 2023. Analysts led by Rajvindra Gill, rate the stock as Buy, highlighting its “favorable risk/reward profile” and AI capabilities, among other reasons.

In a research note Monday, Needham wrote that its fiscal year estimates for
‘s earnings and sales take declines in gaming, weakness in China data centers and other factors into consideration.

So far this year, Nvidia (ticker: NVDA) shares have tumbled nearly 44%. In November, the company reported adjusted earnings per share of 58 cents, while Wall Street had anticipated 71 cents. It also reported revenue of $5.93 billion, while analysts had penciled in $5.78 billion.

Gill anticipates the first half of next year “to remain choppy as estimates likely need to come down further.” 

“Yet for NVDA, we think estimates are much closer to the bottom,” he continued, adding that he believes the stock should return to its pre-Covid trading levels as both gaming and data center growth increase later next year. New products, including those based on its H100 chip, will also aid revenue growth.

“Long-term, we believe the company is on the forefront of the transition to AI workloads,” wrote Gill, who increased his price target to $230 from $200.

Cowen analyst Matthew Ramsey is also optimistic about the company. 

“NVIDIA is the leader in accelerated compute and the key enabler for AI across vertical industries – full stop,” he wrote. “With several strong product cycles anticipated in 2023, we plant the flag and say ‘when’ is ‘now’ to own NVIDIA as our Best Idea in 2023.”

Nvidia shares dipped 2% to $162.43 early Monday.

Write to Emily Dattilo at emily.dattilo@dowjones.com

Credit: marketwatch.com

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