Piper Sandler analyst Harsh Kumar reiterated an Overweight rating and 0 price target on NVIDIA Corp (NASDAQ: NVDA).
Nvidia could be a big winner this earnings season, with profits driven by solid performance in the chip maker's gaming and data center businesses, Kumar said.
"We are looking for a significant beat and raise when the company reports earnings on Wednesday after market close, as both gaming and data center continue to perform well," Kumar added.
He said a new upgrade cycle in GPUs could drive growth in gaming.
Kumar projects a 4.3% quarter-over-quarter increase for the January quarter, which the company could beat, he added.
Although demand for gaming remains strong and will continue to grow over the next few quarters, Kumar believes Nvidia's data center business will drive revenue this quarter.
The analyst sees data center trends accelerating in 2022 and predicts 7.5% sequential growth this quarter.
With trends reaccelerating, he added that the data center business could even reach double-digit growth.
"We believe the data center business will be responsible for much of the revenue performance, translating to both an EPS and revenue beat," he said.
Kumar noted Nvidia "is supply-constrained at this point in time," affecting both the gaming and data center business.
Regardless, he added that the company is better positioned to get supply than competitors.
He expects the next quarter's guidance to be up sequentially, even if gaming sales have historically been flat during the April quarter.
On Monday, Truist analysts also expressed an optimistic view of Nvidia's earnings.
Price Action: NVDA shares traded higher by 9.02% at $264.44 on the last check Tuesday.
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