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The analyst expects a beat-and-raise quarter from Nvidia “barring any unforeseen supply issues.”
“Consumer/gaming/miner demand has softened, but NVDA’s data center strength, richer gaming mix (per our recent Steam/pricing survey), and potential channel fill with new RTX 40xx (Ada Lovelace) gamecards could be positive offsets,” Arya told clients in a note.
He urged clients to focus on “how much of the F2Q guidance upside is driven by gaming (vs. data center) mix” as that is likely to decide the Nvidia stock reaction to EPS.
“Many investors appear to be waiting for a large reset in the gaming segment to re-engage with the stock, per our discussions,” the analyst added.
The analyst also estimates that Nvidia has only 5-10% total exposure to the crypto market and said that investor concerns in this context are “overstated.”
“Constrained supply and availability of crypto-specific CMP products likely prevented the channel from stocking up on gaming cards, helping minimize/avoid a repeat of CY18/19 downturn.”
Net-net, Arya continues “to like the stock” in the context of a compelling market valuation after a sharp selloff in tech stocks recently.
By Senad Karaahmetovic
