The firm shared some supply/demand struggles concerning its flagship gaming chips
The shares of NVIDIA Corporation (NASDAQ:NVDA) are taking a step back this morning, down 3.4% at $560.22, following its fourth-quarter earnings report. The company did post revenue and earnings per share that topped analysts' estimates, but what appears to be sinking the stock this morning is the company's struggles to keep its flagship gaming chips in stock amid a global chip crunch.
Analysts appear undeterred this morning. No less than 14 have already lifted their price targets, the highest coming from Needham to $800 from $700. J.P. Morgan Securities, which lifted its price target to $660, predicted that the supply/demand issues the company is facing will normalize by the second half of the year.
Sentiment surrounding the equity was already optimistic coming into today. Of the 21 in coverage, 17 considered NVDA a "buy" or better. Meanwhile, the 12-month consensus price target of $614.93 stood at a 9.8% premium to last night's close.
Option players have taken a similarly bullish stance. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), NVDA sports a 10-day call/put volume ratio of 2.29, which stands higher than 89% of readings from the past 12 months. This implies these traders have been picking up calls at a much quicker clip than usual.
This generally sunny outlook doesn't come as much of a surprise. NVDA has seen a decent run on the charts since last year's late-March lows, notching a one-year return of roughly 121%. Since hitting an all-time high of $614.900 early last week, however, the security has been cooling, though long-term support at the equity's 120- and 1400-day moving average could help capture some of this pullback.