Nvidia shares jump but Tegra growth worries analysts
Shares of Nvidia Corp rose as much as 11 percent on Friday on the company's strong third-quarter revenue forecast, but brokerage Evercore Partners said it was surprised with the lack of growth of the graphics card maker's much-touted Tegra processors.
Nvidia shares touched a high of $14.86 early in the session, but pared most of their gains to trade up 2 percent at $13.57 in heavy-volume trade on Nasdaq.
The company, once known for its graphics cards for PCs, has recently forayed into smartphones and tablets, and said its phone business ramped up toward the second half of the reported quarter.
The management gave a flattish guidance on Tegra and appeared to be relatively non-committal to its growth, which was surprising, Evercore said in a note to clients.
We wonder when Tegra finally catches a wave and delivers the robust growth investors had been waiting for, Evercore said and cut its price target on the stock to $11 from $12.
Nvidia expects third-quarter revenue to rise 4-6 percent from the second quarter, or to $1.06-$1.08 billion.
Stifel Nicolaus cut its price target to $25 from $29, citing research and development spending was higher than its estimates.
However, Stifel said it continues to view Nvidia as providing disruptive technology in both mobile computing and data centers, and maintained its buy rating on the stock.
(Reporting by Siddharth Cavale in Bangalore; Editing by Roshni Menon)
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