Thursday, January 5, 2017

Citigroup revises target for Nvidia.

 Nvidia's sales to automotive customers will boom in 2018 to over $1 billion, says Citigroup, which hiked its price target on Nvidia stock. Target raised from $110 to $120 in the short term.

Citi expect autos to drive significant growth starting in 2018 and model auto sales around $1 billion or significantly above street's $655 million. 

Nvidia CEO Jen-Hsun Huang is slated to give a keynote speech at CES, formerly the Consumer Electronics Show, in Las Vegas on Wednesday evening.

While Nvidia's chips are currently used in Automated Driver Assistance Systems (ADAS) which improve safety, Citigroup's Atif says they'll also be built into more complex self-driving cars that require artificial intelligence software.

Nvidia's automotive partners include China's Baidu, Volvo, BMW, Audi and Honda Motor. 

Auto represents 6% of Nvidia's total sales currently but should be an area of strong growth in 2018. Nvidia estimates annual infotainment opportunity at $2 billion (20 million cars), use of deep learning processing beyond forward camera detection for self-driving cars at $2 billion (15 million cars), and transportation as a service at $2 (billion) to $6 billion opportunity.

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