×
Pro Analysis

Buy Nvidia on transformation into virtual reality, autonomous driving supplier, Citi says

Jen-Hsun Huang, CEO of Nvidia, holds a Nvidia Drive PX Auto-Pilot Computer during the GPU Technology Conference in San Jose, California, last March.
David Paul Morris | Bloomberg | Getty Images
Jen-Hsun Huang, CEO of Nvidia, holds a Nvidia Drive PX Auto-Pilot Computer during the GPU Technology Conference in San Jose, California, last March.

Citi Research initiated coverage of Nvidia with a buy rating as the company's new end markets will drive better-than-expected financial results.

"We believe Street is underestimating sales/earnings growth in next three years as Nvidia continues to transform itself from a PC to a diversified gaming, data center and auto graphics company," analyst Atif Malik wrote in a note to clients Wednesday.

"We view NVDA stock as a play on multiple secular themes like VR/AR gaming, deep learning, artificial intelligence and self-driving cars."

Tesla announced in October it will use Nvidia chips for its new self-driving hardware system in Model S, Model X and upcoming Model 3 cars.