Nvidia’s over-ambitious 2019 targets could be a disaster waiting to happen

Nvidia got off the horn with its investors last week offering a dividend to sweeten an otherwise shaky couple quarters. But despite the recent stock crash, Nvidia has high hopes for 2019. It expects a massive 35% growth spurt in Q4 that will more than make up for its recent GPU indigestion - but can it possible deliver? Many analysts don’t believe it can. Not only is that mammoth Q4 sales growth a lofty target - a proverbial ‘hockey stick’ - it’s up there with the growth experienced by the company when cryptocurrency mining burst into the mainstream consciousness. Nvidia’s stock reached $290 last year at crypto’s peak, but the subsequent crash dragged it all the way down to $127 over Christmas. Share price has since stabilised at $157. Nvidia’s financial report did some good in regaining some trust amongst investors, though the company is still fending off inventory build-up going into the new year. “The key question: is a 35% y/y growth exiting FY20 realistic? Our belief is that it is not realistic because it is similar to the growth rates during the crypto-boom,” Loup Venture’s analyst Gene Munster says (via Reuters).

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