NVIDIA (NVDA. US) Q1 revenue and earnings per share hit an all-time high year-on-year, but Q2 revenue guidance was less than expected, resulting in a sharp decline in the share price. Wall Street analysts lowered NVIDIA's target price because of concerns about the weakness of the game business. Christopher Rolland, an analyst at Susquehanna, lowered NVIDIA's target price from $280 to $260 and maintained a "positive" rating.
Rolland's quarterly results were not as good as Wall Street's expectations. NVIDIA management said that due to the conflict between Russia and Ukraine and the blockade of the epidemic, the revenue in the second quarter may be reduced by $500 million, of which the game business will lose $400 million. Rolland did not think the setback of the game business was an accident. He was optimistic about the prospect of the data center business, but reduced his expectations and target price for NVIDIA because the company still faced multiple adverse factors.
Citigroup analyst atif Malik lowered NVIDIA's target price from $350 to $315 and maintained its "buy" rating.
Malik said that due to the influence of markets such as Russia, he lowered his expectations for the game business in April. The outlook for the data center has not changed, and the valuation "reset" of the game business provides an attractive entry point. NVIDIA's current P / E ratio is 20% lower than that of large technology growth stocks, and Malik is optimistic about the risk return of the stock.
Morgan Stanley analyst Joseph Moore lowered NVIDIA's target price from $217 to $182 and maintained its rating of "flat with the market".
Moore believes that despite the strong data center business, the "correction" of the game business is almost certain due to the slowdown in demand from computer game players and encryption miners.
Deutsche bank analyst Ross Seymore lowered NVIDIA's target price from $255 to $190 and maintained its "hold" rating.
Seymore believes that the current uncertainty of the game business and investors' growing doubts about the sustainability of the data center business may put pressure on NVIDIA's share price in the near future.