NVIDIA (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD) were in focus this week following a crash in Bitcoin and its peers in the wake of China's clampdown on the virtual currencies. This had investors questioning if the fallout will negatively impact NVDA and AMD stock. In the view of RBC analyst Mitch Steves, the answer is "no."
While there is a soft relationship between price and demand, technology and hash rates drive the actual sales, said the analyst.
Steves explained, "With the China ban, the only way to obtain crypto currencies mined with GPUs is to now mine them with computing power (or purchase them in person from a stranger). China is now banning VPNs and straight purchases (Fiat -> Crypto), which means the best way to obtain the currency without purchasing it is to mine it using GPUs (ASICs for Bitcoin)."
Steves said while price of the coin can help drive demand, the network rate is the leading indicator.
"Importantly, the network rate has gone up ~2TH/s in a single day (after China news), and we think individuals looking to obtain crypto currencies in China will now purchase more computing power give that it is the only legal way to do so," concluded the analyst.
RBC Capital has an Outperform rating on NVIDIA.
For an analyst ratings summary and ratings history on NVIDIA click here. For more ratings news on NVIDIA click here.
Shares of NVIDIA closed at $169.40 yesterday.
Bron: Streetinsider
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