This top chip company has reported strong earnings all year long, and the picture continues to grow brighter. NVIDIA Corp. (NASDAQ: NVDA) is one of the leaders when it comes to supplying graphics processing technology for the 3D graphics market, including desktop graphics processors and gaming consoles.
NVIDIA is also moving into visual computing chips for cars, mobile devices and supercomputers. The company has a technology partnership with electric car maker Tesla Motors. It has been able to use its ability to leverage past investments, with a more controlled spending structure ahead on unified, which enables strong cash flow that is allowing a focus on capital return, which is currently estimated to be $1 billion next year.
Top Wall Street analysts feel the stock is maturing to a platform company from a pure chip company, and Jefferies sees the stock continuing to benefit from four secular trends: VR, PC gaming, chips in the automobile industry and graphic processing units in the cloud.
The company recently reported incredible quarterly numbers, and forward guidance also came in to the upside. The Jefferies report noted:
Nintendo announced that it has selected Nividia’s Tegra processors to power its new home gaming system. We estimate this to be a $200-$300 million annual opportunity for the company’s near term. We assume something in the 13 million unit range and an average-selling-price of about $40. We see upside to 2017 sales and earnings-per-share estimates, with the EPS upside in the 11c to 16c range.
NVIDIA investors receive a 0.65% dividend. The $80 Jefferies price objective is well above the consensus target of $66.61. The stock closed Friday at $70.56.
This internet travel leader took a huge leg down earlier this year before rebounding sharply. Priceline Group Inc. (NASDAQ: PCLN) operates Booking.com, which provides online accommodation reservation services, as well as Priceline.com, which offers hotel, rental car and airline ticket reservations services, as well as vacation packages and cruises through its Name Your Own Price and Express Deals travel services.
The company also operates Agoda.com, an online accommodation reservation service for consumers in the Asia-Pacific region, and RentalCars.com, which offers car rental reservation services.
Trading at a low 17 times fiscal year 2017 earnings estimates, the travel giant is seen by many Wall Street analysts as an “open-ended” growth story. Many on Wall Street continue to see comparisons easing for international bookings and margins will improve in the second half of the year and into 2017.
Priceline reported earnings earlier this month, and while revenue was in line with Wall Street estimates, earnings per share and EBITDA came in better. Bookings growth was solid driven by a 24% year-over-year gain in hotel room bookings. Jefferies is above consensus going forward and did note that while the recent terror attacks in Europe affected gross bookings and cancellations in respective markets, they did not have an impact on overall growth.
The Jefferies price target is set at $1,700. The consensus target is $1585.25, and the stock closed Friday at $1,474.82.
These four very hot growth companies are better suited for more aggressive growth accounts. All could bring stellar gains through the rest of 2016 and next year, as all have solid franchises and market share in their respective arenas of business.