- The US and China have agreed to go ahead with further trade talks, but the ongoing US government shutdown could derail trade negotiations, a report said.
- The outcome of the trade talks is especially relevant for the semiconductor industry that relies heavily on manufacturing steps in multiple geographic regions, according to William Stein at SunTrust Robinson Humphrey.
- Among the semis industry, Nvidia stands out as a structural grower, according to Stein.
- Watch Nvidia trade live.
Nvidia is a good bet in the semiconductor space amid the uncertainty of the trade talks between the US and China, an analyst said Friday.
After ending a three-day trade negotiation in Beijing, the US and Chinahave agreed to go ahead with a further set of talks at the end of January in Washington, DC, The Wall Street Journal reported on Friday. But, the talks could be delayed due to the US government shutdown linked to a funding request by President Donald Trump to build a wall on the southern border, the report said.
"We believe a constructive resolution will lift semis, but a delay or destructive resolution will take most lower," William Stein, an analyst at Sunset Robinson Humphrey, said in a note out on Friday. The outcome of the trade talks is especially relevant for the semiconductor industry, which relies heavily on the manufacturing steps in multiple geographic regions, Stein said in December.
Among the semis industry, Nvidia stands out as a structural grower, according to Stein.
Nvidia on Sunday unveiled its new GeForce RTX 2060 gaming graphics card, which at $349-$450 can make the chipmaker's new Turing architecture accessible to laptop gamers. Like its previous Turing cards, the RTX 2060 also supports new features such as real-time ray tracing, Nvidia's niche technology that allows for more cinematic and realistic visual.
"We view the announcement as distinctly positive," said Stein. He added that when the card becomes available on January 13, it will help boost the company's fourth-quarter earnings, which will be out on February 14.
Stein also noted that Nvidia has looked past its GPU-inventory problem. Nvidia in November guided its fourth-quarter revenue 20% below the Wall Street consensus, pinning its problems on an excess of mining GPUs post the crypto-currency boom.
"Our anecdotal review of inventory from 3rd party GPU sellers indicates a significant decrease in GPU inventory relative to the levels we observed when NVDA reported third-quarter results," Stein said.
Stein has a "buy" position and a $237 price target for Nvidia 60% above where shares were trading Friday.
Nvidia was down 34% in the past year.
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