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BofA analyst Vivek Arya says that Nvidia (NVDA +1.5%) and AMD (AMD +1.0%) are already catching gaming tailwinds ahead of the major console upgrades later this year.
Arya writes that NVDA’s most popular Turing card is exceeding supply due to the coronavirus-related rise in active gamers. Turing’s penetration grew 21% on the month.
For AMD, Arya says Navi adoption is in the early stages, but is catching on faster than the prior generation Vega.
In April, BofA said 57% of AMD games were using legacy GPUs, but this could change with the upcoming launch of the high-end Big Navi.
BofA maintains Buy ratings on Nvidia and AMD.
Citing “several forms of valuation” that make Amazon (NASDAQ:AMZN) worth $4,500 to $5,000 per share, Needham stars the company at Buy and a $3,200 12-month price target, or about 20% upside.
Needham’s valuation factors in Amazon’s “track record of TAM-expanding decisions that elongate its growth runway” and diversify its revenue stream, a Services business that stands at 43% of sales at a 19% operating contribution, and media asset values of about $500B.
The $4,500/share estimate also factors in the ecosystem value. Needham says Video, Music, Twitch, and groceries keep Prime subscribers in Amazon’s ecosystem an extra three years and grows their lifetime value by 50%.
Amazon shares are up 0.8% pre-market to $2,637.06.
In his latest shareholder update, AT&T (NYSE:T) Chief Financial Officer John Stephens says the company expects to reach nationwide 5G coverage this summer.
Speaking at the Credit Suisse Communications Conference, Stephens said the 5G network covered 120M at the end of Q1, and covers more than 160M people in 327 markets today.
He also added that the company has passed 80% completion of its planned FirstNet build, and had 1.3M subscribers across more than 12,000 agencies at the end of Q1.
COVID-19 visibility is still limited, but Stephens says AT&T maintains confidence in its ability to generate cash.
That brought him to reassurances that “continued transformation and cost savings” allow AT&T to maintain its commitment to the dividend while investing (in 5G, fiber and HBO Max) and reducing debt.
The company is expecting the dividend payout ratio to be in the 60% range for the full year.
Enphase Energy (ENPH -15%) sinks after short seller Prescience Point Capital issues a negative report that says 39%, or $205M, of the company’s reported U.S. revenue is “fabricated” by “accounting gimmicks that artificially inflate revenue and profits.”
Prescience also claims former Enphase employees in India believe the company is utilizing an offshore finance and accounting team to help executives perpetrate potential accounting violations.
Separately, a company director reportedly sold 180K shares on June 15 at $50.23.
Seeing slow improvements to the macro backdrop, RBC maintains an Outperform rating on Apple (NASDAQ:AAPL) and raises the price target from $345 to $390.
Analyst Robert Muller says that Apple remains in a “league of its own” regarding share buybacks.
The analyst thinks the Street is either not giving AAPL enough credit for capital returns or underestimating the organic growth.
Muller says that keeping the buyback pace at about $70B and growing revenue by 3-4% would allow Apple to be cash neutral within a decade.
Apple shares are up 0.9% pre-market to $355.15. The company has a Bullish average Wall St. Analysts rating.
