Needham Raises Price Target for $NVDA to $200 — Cites Lucrative Toyota Deal as Catalyst

I am so biased against NVDA, it’s ridiculous. However, I know the reasons why I hate the stock is purely emotional and irrational. Because the stock went up and I didn’t play it, or profit from its ascension, I dislike it. This is childish thinking and I am fully aware of my limitations — due to a very harsh upbringing inside of the sewers of Brooklyn, NY.

Nevertheless, since my investments are systematic and my feelings are nothing more than a formality when it comes to where my money goes, I happen to be long NVDA, and other mega cap tech, at this very moment in time. In other words, as you read this article, filled with the insecurities and random chaotic thoughts from some crazed anonymous misanthrope, who quit his 7 fig Wall Street gig to blog all day about RARE PEPE art, I am long NVDA.

Needham agrees. It’s a good idea to be long.

NVIDIA target raised to $200 at Needham — Toyota deal alone could generate $1-1.7B of incremental sales (146.77)
Needham raises their NVDA tgt to $200 from $130 owing to their higher conviction that the Toyota (TM)-NVDA announcement will generate meaningful revenue over the next 24 months. Their meetings with Toyota confirm that it has aggressive plans to deploy Level 2 Advanced systems in mass market in the U.S. and Japan over the next 2.5 years. All of these systems will be on NVDA’s Drive PX Xavier platform. From this deal alone, assuming ASPs of $200, they calculate $1-1.7B of incremental sales, or $0.35-0.65 EPS. If they think about what the model would look like in CY19/CY20, they calculate earnings power of $5-6, and thus they believe shares should be valued at 40x P/E (currently valued at 37x).

My allocation was triggered because mega-cap stocks outperformed last week. As such, today I am long a sundry of mega cap companies who possess excellent free cash flow. My investments are geared by both technicals and fundamentals — the way the Gods intended.