Analysts Like Nvidia’s EGX Edge Supercomputing Platform, 5G Opportunity

NVIDIA Corporation (NASDAQ: NVDA)’s CEO delivered the keynote address at Monday’s Mobile World Congress — and he certainly made an impression.

The Analysts

Bank of America analysts led by Vivek Arya maintained a Buy rating and $250 price target.

Morgan Stanley analysts Joseph Moore and Craig Hettenbach maintained an Equal-Weight rating with a $180 price target.

The Theses

The speech promoted Nvidia’s EGX Edge Supercomputing Platform, which unites the company’s CUDA-X software libraries, GPU servers and Mellanox SmartNICs.

“The EGX Platform will allow organizations to harness billions of always-on sensors and devices from factory floors, manufacturing inspection lines, or city streets to securely deliver Internet of Things and AI at large scale and low latency,” Arya wrote in a note.

EGX will be integrated into Microsoft Corporation (NASDAQ: MSFT)’s Azure for edge-to-cloud AI computing and into Red Hat’s OpenShift to create a cloud-based 5G infrastructure for the telco industry. It has already been adopted by Walmart Inc (NYSE: WMT), BMW, Procter & Gamble Co (NYSE: PG) and Samsung.

“This platform allows NVDA to shift focus towards the large and under-penetrated market of enterprises looking for better ways to leverage data in order to cut costs/improve efficiency, and away from the competitive and sometimes volatile world of consumer graphics,” Arya wrote.

Nvidia also announced its partnership with Ericsson on the first GPU-powered 5G virtualized radio access networks for AI and IoT services.

“It will take time to properly evaluate these announcements, in particular to understand the differentiation of EGX vs. DGX, the scope of the company’s ambition in the infrastructure space, and to what degree this is additive to the ecosystem provisioning AI and IoT services vs. replacing traditional microprocessors or ASICs in the RAN portion of the infrastructure,” Morgan Stanley wrote.

At first look, though, the analysts consider the developments a solid opportunity to expand Nvidia’s total addressable market.

Price Action

At time of publication, Nvidia shares traded up 1% at $198.08.

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