Bernstein Reiterates Outperform on NVIDIA, $225 Price Target

Bernstein SocGen Group analyst Stacy Rasgon reiterated an Outperform rating and $225 price target on NVIDIA (NASDAQ: NVDA).

“Likely under pressure, but NVIDIA still not giving a foundry deal actually reflects NVIDIA’s strong preference in TSMC. Intel is a competitor to NVIDIA, as NVIDIA wants to enter CPU and Intel wants to enter AI market.

NVIDIA doing this with a competitor, possibly, is just to assuage the pressure from the US government.

NVIDIA decides to give US$5B to Intel so that they don’t have to commit to using Intel Foundry attests TSMC is still the choice of NVIDIA even under the pressure. We hence remain positive on TSMC.

So what now?

We understand the move in Intel’s stock, and (notwithstanding company statements that the government was not involved in this deal) the idea that the administration is now likely keenly interested in Intel might be a decent (if somewhat soiled) long case for now in this new world we live in.

That being said, Intel appears to be entering this deal from a position of weakness rather than strength, it really does nothing to strengthen the manufacturing story, and it will probably be several years for any new products to make their way to market.

For now their biggest asset obtained from it is probably Jensen’s goodwill; we remain sidelined.

For NVIDIA, they are clearly flexing their muscles, got a good deal on their investment (already up over a billion dollars) and perhaps gain further goodwill from the administration; we remain buyers.”

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