Investing.com – Nvidia is riding high on Friday following a price hike from RBC after concerns about weakness in data centre spending were swept away, thanks to an upbeat quarter report from Intel (NASDAQ:).
“Data centre came back much more strongly than even we anticipated this quarter”, Intel (NASDAQ:) chief financial officer George Davis said in the Intel’s third quarter results. That was music to the ears of many Nvidia investor and analysts alike, as data centre segment sales make up more than quarter of the chipmaker’s overall revenue.
Pointing to Intel’s comments on higher-than-expected demand in data centre, which focuses on server chips, RBC lifted its price target on Nvidia to $251 to $217, forecasting that the chipmaker will likely experience higher growth relative to CPU server demand.
NVIDIA (NASDAQ:) surged more than 3% higher.
“Nvidia will experience a return to growth as utilization of GPUs (graphics processing units) in the Data Center have officially improved and are no longer running below normal,” RBC said in a note to clients.
The anticipated return for data centre growth comes just as U.S.-China relations are seemingly on the mend, with CNBC reporting Friday that both countries are closing on finalizing their ‘phase one’ trade deal.
The United States and China are close to finalizing some sections of a trade agreement after a phone call between both trade teams, CNBC reported on Friday, citing a statement from the Office of the U.S. Trade Representative.
RBC also said investors were too cautious on Nvidia’s gaming business, which still makes up the bulk of revenue. That echoed earlier sentiments from some of its peers on Wall Street.
Earlier this month, Evercore ISI raised its price target on Nviida to $225 from $185, on the back expectations for a ramp up in gaming demand and a recovery in the data center division, driven by an anticipated product refresh.
Nvidia is up about 53% so far this year and has an average price target of $193.1, according to consenses estimates from Investing.com.
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