Investing.com – Nvidia (NASDAQ:) climbed on Monday after an analyst upgraded his outlook on chipmaker on signs of ongoing growth in its gaming business.
Needham analyst Ari Shusterman upgraded Nvidia to hold from underperform, sending the chipmaker’s shares up 3%.
“Gaming is showing signs of positive momentum as attach rates for ray tracing games have accelerated. Hyperscalers have also begun to spend again on AI workloads,” Shusterman said.
The upgrade from Shusterman marked a turnaround from a year ago, when he raised concerns that Nvidia would experience slowing sales of consumer graphics cards and hyperscaler spending amid a global economic slowdown.
The then-bearish call, however, failed to materialize as Nvidia oversaw an “aggressive” channel refill, the analysts said.
Looking ahead to the first half of the year, the path for Nvidia is somewhat easier as it faces easy year-over-year comparisons, particularly in graphics and data center, he added.
Needham is not the only one on Wall Street touting growth for Nvidia’s gaming business.
Benchmark analyst Ruben Roy recently increased the target price on Nvidia to $275 from $240 on expectations that the chipmaker will benefit from a “reacceleration of data center spending, coupled with an improving demand environment for GPUs in gaming end markets.”
“Potential catalysts for Nvidia shares in 2020 include positive bias to estimates on contnued data center demand improvement, visibility into its 7nm product road map, and the closing of the pending Mellanox acquisition,” Roy added.
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