By Louis Juricic and Sarina Isaacs
Investing.com -- Here is your weekly Pro Recap on the biggest headlines out of tech this week: analysts bump up price targets for Nvidia; Cisco bumps higher even after missing guidance targets; Tesla cuts prices again; and Coinbase wins a regulatory battle.
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Nvidia goosed by rising price targets
This past week, ahead of earnings due out on Wednesday, Oppenheimer analysts boosted Nvidia's (NASDAQ:NVDA) price target to $500, writing that Nvidia “remains the purest scale play on AI adoption.” And Rosenblatt hiked Nvidia's price target to as much as $800 per share, which is a new Street high.
Rosenblatt analysts wrote that investor expectations for earnings per share in fiscal 2025 (calendar year 2024) "have risen substantially, but we recommend investors stay the course here and remain bullish amid the recent pullback in the stock over the past month."
The analysts added, "Demand will dictate NVDA's long-term AI revenue opportunity, but supply should be the primary determinant for its data center revenue at least through C2024."
Analysts are looking for second-quarter earnings of $2.07 per share on revenue of $11.17 billion. For the current quarter, the Street is seeking EPS of $2.35 on revenue of $12.49B.
Shares rose 7% for the week to $432.99.
Cisco Systems rises on hopeful talk from management, even after soft sales forecast
Cisco (NASDAQ:CSCO) on Thursday issued disappointing full-year revenue guidance, but it topped Wall Street targets for the fiscal fourth quarter and the stock gained on management optimism across several areas, including AI.
The company said adjusted earnings per share came to $1.14 - $0.08 better than consensus - on revenue of $15.2B, above the $15.05B average target, on the strength of a growing enterprise appetite for AI, security, and cloud.
Earnings guidance for Q1 topped expectations at $1.02 to $1.04 per share - the Street was looking for $0.99 - and revenue of $14.5B to $14.7B was in line with targets. Full-year expectations were for earnings of $4.01 to $4.08 per share on sales of $57B to $58.2B; analysts were seeking $4.04 per share on $58.4B in revenue.
The stock took a hit on the soft revenue guidance until management talked up the company's future prospects across several areas, including AI.
CEO Chuck Robbins said on the earnings call that Cisco is poised for "further share gains" in campus switching, wireless LAN, and SP routing, having gained "over 3 percentage points of market share" vs. the prior year in those key areas, and he also said he believes the company is "super well positioned" on AI.
Following these results, analysts at BofA, Citi, and KeyBanc all kept their neutral ratings on the stock.
BofA and KeyBanc highlighted the company's solid execution and innovation, but BofA sees "additional risk to estimates" given a "diminishing backlog contribution" that would necessitate a "significant order recovery throughout F24, which might not materialize." And KeyBanc is staying neutral until it sees "more consistent signs of share gains and improved visibility into F2H24 order growth ramp."
Citi similarly said it is staying on the sidelines until it sees further market share gains in "switch and security," adding that Cisco's talk of AI share gains was "encouraging," but "we await third party data verification to get more excited about share gains."
Evercore, however, maintained its Outperform rating on Cisco and raised the target price by $3 to $63, arguing that the fiscal 2024 guidance is "fairly conservative with room for upside" across multiple segments. It also believes the company's commitment to "showing operating leverage," and more consistent share buyback of some $1.5B quarterly, "will resonate with investors and provide higher predictability for CSCO shareholders going forward."
Cisco shares climbed 2.3% to $55.04 for the week.
Tesla cuts prices in China, spurring concerns
Tesla (NASDAQ:TSLA) announced price cuts on its vehicles in China last week, further fueling worries of a potential price war in the country's lucrative electric vehicle (EV) market.
On Monday, the Elon Musk-led EV giant slashed prices for its Model Y long-range and performance editions in China by CNY 14,000, reinvigorating concerns that the firm's rivals in the world's biggest auto market will also be persuaded to roll out similar moves.
And two days later, it lowered the price of its Model X sport utility vehicles and Model S sedans in inventory by as much as CNY 70,000 (CNY 1 = $0.1371), a statement on the company's WeChat account read.
Tesla has been racing to secure its share of a fiercely competitive Chinese market. The firm's shipments in the country slipped by 31% in July, touching their lowest level this year, while global production is expected to fall in the third quarter.
In a call with analysts last month, Musk said it made sense to "sacrifice margins to make more vehicles," arguing that the value of Tesla's cars will go up once its Full Self-Driving mode is perfected.
Evercore ISI analysts predicted in a research note that comparable targeted price reductions might be seen in the U.S. and Europe.
And Morgan Stanley said on Thursday that "Investors are becoming more cautious on China EVs after a solid run in the past 3 months, with Tesla's further promotional activity of particular concern."
Shares slid 8.5% to $215.49 for the week.
Coinbase clears critical regulatory hurdle
Coinbase (NASDAQ:COIN) announced Wednesday it has successfully obtained regulatory approval from the National Futures Association (NFA) to operate as a Futures Commission Merchant (FCM).
This new status, which the company called a "critical milestone," enables eligible customers in the US to access cryptocurrency futures via Coinbase’s platforms.
Coinbase filed an application with the NFA for registration as an FCM in September 2021. Nearly two years later, the company received the green light from regulators.
Shares gained on the announcement, but were still down 8.5% for the week to $73.19.
Senad Karaahmetovic, Yasin Ebrahim, and Scott Kanowsky contributed to this report.
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