New Turing Chips Propel Nvidia Corporation (NVDA) Stock
Nvidia Corporation (Nasdaq: NVDA) investors got some long-awaited good news on Monday when the company unveiled its next-generation Turing graphics chips and said the technology will be available starting in the fourth quarter.
The new Turing cards reportedly produce a six-fold performance boost over Nvidia's prior-generation Pascal graphics cards, and analysts expect the Turing products to be a huge hit.
Turing is Nvidia's eighth generation of graphics chips and its first new batch in two years. Nvidia CEO Jensen Huang says Turing is NVDA's most important innovation in more than a decade.
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"Hybrid rendering will change the industry, opening up amazing possibilities that enhance our lives with more beautiful designs, richer entertainment and more interactive experiences," Huang says in a statement.
The high-end graphics card market has boomed in recent years due to demand from cryptocurrency miners and online PC gamers. The rise in popularity of battle-royale style games such as "Fortnite" has forced many gamers to upgrade their hardware to compete at a high level. Nvidia's gaming sales are up 46 percent since the company launched its Pascal chips in 2016.
NVDA said its Quadro RTX workstation graphics cards featuring Turing cores will begin shipping in the fourth quarter, but Bank of America analyst Vivek Arya says consumers might get their first taste sooner.
"Workstation products tend to have more strict validation requirements than consumer products, so it remains likely -- in our view -- that new consumer cards featuring Turing GPU cores could still ship prior to Q4," Arya says.
Arya says Nvidia's ProViz segment doesn't get as much respect as it deserves on Wall Street, as investors typically focus on data center, cryptocurrency and gaming revenue. ProViz revenue has been growing at a double-digit pace over the past four quarters, and Arya says Nvidia has a major disruption opportunity with Turing.
"Jensen's new product and architecture/tech announcements were impressive and could position NVDA to disrupt the $250 billion visual effects industry [and] deliver upside to ProViz expectations," Arya says.
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Arya says Nvidia is his top semiconductor stock pick for long-term investors. Bank of America has a "buy" rating and $340 price target for NVDA stock.
Wayne Duggan is a freelance investment strategy reporter with a focus on energy and emerging market stocks. He has a degree in brain and cognitive sciences from the Massachusetts Institute of Technology and specializes in the psychological challenges of investing. He is a senior financial market reporter for Benzinga and has contributed financial market analysis to Motley Fool, Seeking Alpha and InvestorPlace. He is also the author of the book "Beating Wall Street With Common Sense," which focuses on the practical strategies he has used to outperform the stock market. You can follow him on Twitter @DugganSense, check out his latest content at tradingcommonsense.com or email him at wpd@tradingcommonsense.com.
