NVIDIA Corporation’s (NASDAQ: NVDA) $40 billion deal to buy U.K. chip designer Arm Holdings has prompted an analyst at Needham to lift his price target to the highest on Street.
The Nvidia Analyst: Rajvindra Gill maintained a Buy rating on Nvidia and increased the price target from $600 to $700.
The Nvidia Thesis: Financially, the Arm acquisition would be potentially accretive, adding $1.20-$1.65 to Nvidia’s earnings per share in calendar year 2022, Gill said in a Tuesday note.
The new price target is based on 52 times P/E multiple on calendar year 2022 EPS of $13.50, with $12 for base Nvidia and $1.50 for Arm.
Strategically, the Nvidia-Arm combination will create the leading AI computing platform in the semiconductor industry, Gill said. The combo will become ubiquitous across the semiconductor industry.
The combination of three processors under one house – GPUs for accelerated computing, NPUs for networking and security processing and CPUs for low latency, single thread predictable processing – positions Nvidia to be the leading AI platform in the industry, the analyst said.
Further, Nvidia can quickly bring its GPU IP to Arm’s broad CPU ecosystem of smartphone, tablet, infrastructure, AI/ML, IoT and embedded automotive chips.
“The other major strategic rationale for the deal is to target the “trillions” of devices that will be connected to the data center, ranging from smart retail, smart streets, smart robotics, industrial, wearables, and auto,” the analyst wrote in the note.
All those devices, he said, will be accelerated and include AI capability in the near future. The analyst estimates a $250 billion total addressable market by 2022, $95 billion devices $80 billion data center and $75 billion for auto, edge and IoT.
Nvidia shares traded around $517 at the time of publication.
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Germany pays tribute to victims of 1980 Oktoberfest bombing
BERLIN (AP) — Senior officials and survivors paid tribute Saturday to the victims of a deadly neo-Nazi attack on Munich’s Oktoberfest 40 years ago, as Germany’s president warned that far-right extremism remains a persistent problem in the country.
The bombing on the evening of Sept. 26, 1980, claimed 13 lives, including that of three children and the attacker, student Gundolf Koehler, a supporter of a banned far-right group. More than 200 people were wounded.
“Right-wing extremism has deep roots in our society,” President Frank-Walter Steinmeier said at a memorial event in the Bavarian capital. Germany has seen a number of further attacks inspired by anti-Semitism, hatred of foreigners and neo-Nazi ideology in recent years, including a series of far-right killings that police initially attributed to migrant gangs.
Steinmeier said the perpetrators weren’t “disturbed people,” but rather part of “networks that we need to investigate.”
An initial investigation of the Oktoberfest attack concluded that Koehler acted alone, out of personal frustration. But in 2014, federal prosecutors revisited the case after a previously unknown witness surfaced.
In July, prosecutors said the witness’ indications that there may have been co-conspirators hadn’t been corroborated, but that it was clear Koehler had been motivated by far-right extremism. Victims’ lawyers say there are still many unanswered questions about the attack.
Bavaria’s governor, Markus Soeder, apologized to survivors and the victims’ families for mistakes made during the initial investigation.
Earlier this week, the German government announced it was setting up a 1.2 million-euro ($1.4 million) fund to help survivors of the attack.
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