- Bear Stearns is raising their FY2H07 and FY08 estimates for NVIDIA (NASDAQ:NVDA). For the Oct-Q, they are raising revenues from $750M (+9% QoQ) to $757M (+10% QoQ), the high end of guidance of up 8-10%, based on better than expected trends in the notebook GPU and MCP businesses. Desktop GPU demand has also been tracking slightly above expectations due to an improvement in desktop builds. Firm's EPS goes from $0.36 to $0.37, above consensus of $0.34. They are also raising their Jan-Q EPS from $0.42 to $0.43, and FY08 EPS from $1.60 to $1.63.
The firm believes NVIDIA's share gain in notebook GPUs has considerable more room, and expect its share to approach 50% exiting CY06 (from 37% in 2Q). They believe there is a high likelihood that its share could increase to above 50% with Intel's upcoming Santa Rosa platform (to launch in 1H07), based on its initial feedback from customers, and given ATI being late with its next-generation products. In the near-term, better than expected overall notebook builds should also contribute to better NB GPU revenues.
Price tgt goes to $37 from $33 with Outperform reited.
Notablecalls: I believe the note will create some buy interest in NVDA today. However I expect it to be somewhat short-lived and won't move the stock more than $0.50.
The firm believes NVIDIA's share gain in notebook GPUs has considerable more room, and expect its share to approach 50% exiting CY06 (from 37% in 2Q). They believe there is a high likelihood that its share could increase to above 50% with Intel's upcoming Santa Rosa platform (to launch in 1H07), based on its initial feedback from customers, and given ATI being late with its next-generation products. In the near-term, better than expected overall notebook builds should also contribute to better NB GPU revenues.
Price tgt goes to $37 from $33 with Outperform reited.
Notablecalls: I believe the note will create some buy interest in NVDA today. However I expect it to be somewhat short-lived and won't move the stock more than $0.50.
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