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Strategies & Market Trends : The New Economy and its Winners

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To: w0z who wrote (57576)

7/10/2017 11:24:24 AM

From: Bill Harmond

of 57684

07:24

NVDA 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).

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