Bank Of America: Don't Sweat Mixed Nvidia Turing Reviews

NVIDIA Corporation (NASDAQ: NVDA) stock is down 3.5 percent in the past week after the company’s new Turing game cards received mixed initial reviews, but one Wall Street analyst says the value of the Turing technology will become much more obvious over time.

The Analyst

Bank of America analyst Vivek Arya reiterated his Buy rating and $340 price target for Nvidia. He also reiterated Nvidia as his top sector stock pick.

The Thesis

Turing’s hybrid rendering technology, which includes ray-tracing and tensor cores, is aimed more at the future than the present. Arya says the Turing cards may not have much of an impact when it comes to the performance of games that are currently on the market, but new games specifically designed to take advantage of ray tracing should start rolling out over the next three months.

In addition, since Turing cards are the first consumer-class cards with advanced AI and inference capabilities, Arya said demand from researchers and data centers could be robust.

In the near-term, any gamers unwilling to pay for the Turing upgrade will still likely chose Nvidia’s high-end Pascal cards, which are generating solid margins for the company.

“In our view, better availability (and market prices) of Pascal along with initial Turing ramp provides a compelling case for the 52%/70% of NVDA gamers still on legacy/sub-standard tech to upgrade, regardless of which product family gamers ultimately choose to upgrade to,” Arya said in a note.

Price Action

Nvidia stock traded marginally higher to $265.11 following the bullish commentary.

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