Shares of Nvidia were soaring on Monday and even hit a record high as the chipmaker purchased Mellanox Technologies.
The company completed its $7 billion purchase of Mellanox on April 27th. Shares jumped to $322.62 on Monday and even hit an all-time high of $324.50.
The big gains may have also been contributed to two Wall Street analysts raising their price targets on the stock. Needham analyst Rajvindra Gill reiterated a buy rating on Nvidia stock and raised his price target from $270 to $360.
According to the analyst, the company will benefit from its “highly accretive” Mellanox deal and increasing spending by hyperscale cloud data centers. Gill also believes that Nvidia should profit from robust sales of graphics processors for gaming PCs and Nintendo’s (NTDOY) Switch console.
“We expect data center (31% of fiscal Q4 sales), which is Nvidia’s largest growth driver, to continue benefiting from increased demand for both public and private clouds due to the ramp of data consumption in the cloud,” Gill wrote in a note to clients.
Gill also noted that the stay-at-home economy during the coronavirus pandemic is boosting sales of video game hardware. Gaming accounted for 43% of Nvidia’s fiscal fourth-quarter sales.
Last week Piper Sandler analyst Harsh Kumar raised his price target on Nvidia stock to $350 from $330 and kept an overweight rating.
“With the acquisition of Mellanox now complete, we are markedly increasing our revenue and earnings estimates in order to combine the business models,” Kumar said.
“Mellanox is a steady growth company that plays in the areas of Ethernet and InfiniBand interconnect. We think the combination of Nvidia and Mellanox brings the combined company multiple steps closer to being a complete provider of connectivity solutions, while on the verge of being a very vital player in compute.”
Nvidia recently announced that it plans to buy Mountain View, Calif.-based Cumulus for an undisclosed amount.
Disclaimer: We have no position in NVIDIA Corporation (NASDAQ: NVDA) and have not been compensated for this article.