Nvidia Analysts Lukewarm on 'Better Than Feared' Results

(Bloomberg) -- Nvidia Corp. swung between gains and losses on Friday as analysts digested an earnings report and outlook that pointed to some stabilizing trends but offered little in the way of clarity for the company’s longer-term prospects.

While the stock traded down as much as 2% Friday morning, it swiftly erased that decline and subsequently rose as much as 2.2% on the day.

A common theme from analysts was that the print was “better than feared,” though many expressed caution about the company’s data center business. And while Nvidia gave a second-quarter outlook that suggested gaming-chip inventory woes were easing, it removed its full-year outlook.

Here’s what analysts are saying about the results:

Deutsche Bank, Ross Seymore

Would classify the results as “better than feared.”

Inventory issues in Nvidia’s gaming business appear to have subsided.

The company removing its full-year guidance is “the result of continued lack of visibility in datacenter, and we believe a level of conservatism is likely warranted.”

Hold rating.

UBS, Timothy Arcuri

“At a high level, results and guidance were better than many feared,” even with the removal of the outlook, and even though “the overall backdrop in data-center remains mixed.”

Buy rating, price target lowered to $195 from $210.

Morgan Stanley, Joseph Moore

This was a “fairly solid” quarter, but “we’re surprised at the magnitude of data center weakness.”

Isn’t “overly alarmed” by the removal of the full-year outlook. “Most investors that we talk to had been concerned that the bar for 2h was too high, so some conservatism is warranted.”

Equal weight, $170 price target.

Jefferies, Mark Lipacis

The bar “now looks attainable if not beatable,” and the stock should appreciate “as visibility improves and order rates increase.”

“We’re buyers” of the stock, but price target lowered to $210 from $227.

Macquarie Research, Srini Pajjuri

“Optimistic” about a recovery in data center in the second half of the year, but “we’d wait for a better entry given premium valuation and demand uncertainty.”

Neutral rating, $170 price target.

What Bloomberg Intelligence Says:

“The sequential sales growth of 1Q -- or at least easing declines -- needs to strengthen in 2H for gaming and data center to rekindle Nvidia’s thesis and valuation.”

-- Analyst Anand Srinivasan

-- Click here for the research

To contact the reporter on this story: Ryan Vlastelica in New York at rvlastelica1@bloomberg.net

To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Will Daley

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