Nvidia Top Pick with $1,100 Target, Match Group Downgraded

Key Takeaway

• TD Cowen reiterates Nvidia as a top pick with a $1,100 price target, forecasting strong earnings and a 31% rally potential.
• Morgan Stanley downgrades Match Group to equal weight from overweight, reducing the price target to $37 due to slowing online dating growth.
• Morgan Stanley predicts Q1 earnings recovery, spotlighting Nvidia and Amazon for strong performance into 2024.

Analysts Spotlight Nvidia and Match Group

TD Cowen has reiterated Nvidia as a top pick, forecasting strong earnings ahead for the chipmaker. Analyst Matthew Ramsay maintains a buy rating with a $1,100 price target, suggesting a potential 31% rally from its Wednesday close. Nvidia, a key player in the tech sector, has already seen a 70% increase this year. Ramsay's optimism is based on Nvidia's significant revenue and EPS growth, competitive advantage, and market-leading position in accelerated compute and AI. Nvidia is expected to report earnings next month, with Ramsay highlighting the company's potential for sustained, above-peer growth across various verticals.

Conversely, Morgan Stanley has downgraded Match Group, the parent company of Hinge and Tinder, to equal weight from overweight, citing slowing growth in online dating. Analyst Nathan Feather reduced the price target to $37 from $53, noting the unclear future of user growth in online dating. Despite a wide slate of improvements planned for Tinder and Bumble in 2024, Feather mentions low visibility into the success of these initiatives and the momentum-driven nature of online dating. Match Group shares have declined more than 11% year to date, following a 12% drop last year.

Wall Street's Big Calls

Several significant analyst calls have been made, affecting various sectors from technology to consumer goods. Notable mentions include Evercore ISI initiating Nvidia as outperform, UBS upgrading Rivian to buy, and Deutsche Bank downgrading Honeywell to hold. Bank of America has initiated Reddit as neutral, citing it's too early in its journey for a recommendation. JPMorgan has reiterated Tesla as underweight, pointing to a demand problem rather than supply issues. Additionally, Goldman Sachs has initiated coverage on several companies, including GE Vernova as buy and DraftKings as buy, highlighting their growth potential.

Morgan Stanley's Q1 Earnings Outlook

Morgan Stanley predicts a Q1 earnings bottom with a recovery expected in Q2, spotlighting Amazon and Nvidia for strong performance into 2024. Nvidia's 70% increase this year and sustained demand for AI are seen as indicators of robust fiscal Q1 earnings. Amazon is also expected to beat profit estimates through cost reductions. The global market dynamics show mixed performances, with Morgan Stanley highlighting growth prospects in Asia-Pacific stocks like Hana Financial Group and Novatek Microelectronics. The firm also points to overlooked opportunities in European tech stocks with significant upside potential.

Street Views

• Matthew Ramsay, TD Cowen (Bullish on Nvidia):

  "Significant revenue and EPS growth are now largely expected following three consecutive quarters of the print coming in >$2B above previous company guidance... NVIDIA remains the top franchise in accelerated compute and AI ... and we are in the early innings of both paradigm shifts."

• Nathan Feather, Morgan Stanley (Neutral on Match Group):

  "After 2 years of underperformance, we step to the sidelines on online dating as user growth remains cloudy... We believe that soft user growth is more attributable to a lack of innovation than saturation as ~70% of US singles actively looking for a relationship do not currently use online dating."