Can Nvidia’s Winning Streak Continue?

Despite the aura of positivity surrounding the firm, we think recent growth will be challenging to replicate as alternative solutions become more competitive with Nvidia’s bread-and-butter GPU offerings. Earlier this week, Intel and AMD announced a collaboration for a system on chip with a high-end Intel CPU and custom AMD GPU targeting the premium lightweight laptop market as a direct challenge to Nvidia. On Nov. 8, Intel hired prominent GPU architect Raja Koduri (formerly of AMD and Apple) to serve as its own GPU chief architect. We anticipate a bevy of firms targeting Nvidia in 2018 and beyond, across gaming, AI, self-driving cars, and other high-profile end markets. Consequently, we are maintaining our $90 fair value estimate for narrow-moat Nvidia. At current levels, we view shares as materially overvalued.

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