Strong Analyst Defense of NVIDIA Against The Analyst Pack (NVDA)

While NVIDIA (NASDAQ: NVDA) is being battered and tattered in trading, one analyst has decided that today’s fire sale in the stock is creating an opportunity.  American Technology Research has decided to Reiterate its BUY rating on NVIDIA and the buy target was taken down only $1.00 to $26.00.

The report thesis is essentially, "We are buyers of the stock on the dip following the negative pre-announcement.  We believe the fundamental outlook remains positive on GPU leadership….."

It takes guts to make this statement and they may be rewarded for their work.  We have seen at least four downgrades in the stock today with key downgrades from Longbow, Needham & Co., Kaufman Bros., and even from JPMorgan.

We’d rather see analysts come in with their call to arms when prices are on sale rather than after a huge run.  That is the case here.  The problem is that it may fall on deaf ears because the severity of the issues inside with defects and material issues being lopped on top of the already known sell-through rate issues. 

Add in a bear market and the summer doldrums, and it seems like this analyst call may need to be revisited in a week or two.  It’s still a very gutsy call.

Shares of NVIDIA are down 26% pre-market at $13.23, which is a 2-year low.

Jon C. Ogg
July 3, 2008