| Shares of Nvidia rose in premarket trading after the graphics chip maker blew past Wall Street estimates for the third quarter and posted market share gains in each of its core businesses. Nvidia shares gained 19 cents to $35.48 in premarket electronic trading, after closing the regular session Thursday at $35.24 on Nasdaq, where they have traded in a 52-week range of $16.42 to $36.20. The shares have gained about 10 percent over the past year. The Santa Clara, Calif.-based company posted quarterly earnings of 39 cents per share before stock option expenses, well above the Thomson Financial estimate of 35 cents per share. Revenue jumped 19 percent to $820.6 million, beating Wall Street's target of $753.6 million. Jen-Hsun Huang, the company's president and chief executive, called the quarter one of the best in the company's history. However, some analysts recommended profit taking on the shares, as they see more limited upside potential at the company. Stifel Nicolaus analyst W. Blake Fischer downgraded the shares to "Sell" from "Hold," citing concern about the potential for gross margin improvements and the stock's price. ThinkEquity Partners analyst Eric Ross also noted that the stock is trading well above its peers and faces "more risk than bulls care to admit," adding that average selling prices were down overall, die sizes are increasing and rival ATI Technologies is likely to have a competitive offering in the near future. Ross reiterated his "Sell" rating on the stock and raised his price target to $28 from $25. Freidman Billings Ramsey analyst Chris Caso said Nvidia still has good momentum entering 2007, due to the expected ramp of its new high end graphics processing unit, as well as the launch of Microsoft Vista. He still sees upside potential and reiterated his "Outperform" rating, raising his price target from $36 to $40 on higher estimates. |
