After post-quarterly results weakness, Nvidia’s stock is on the rise as analysts digest the launch of the company’s new gaming GPUs. During a presentation at the Gamescom conference in Germany, Nvidia’s CEO Jensen Huang unveiled the new GeForce RTX 2070/80 and the new GeForce RTX 2080 Ti. In a research note this morning, JPMorgan analyst Harlan Sur argued that the new GPUs should “solidify” the company’s leadership position in gaming and drive a “strong upgrade cycle.” Voicing a similar opinion, his peer at Bank of America Merrill Lynch told investors he sees the Turing gamecard launch potentially re-energizing growth.

NEW GPUS ‘SOLIDIFY LEADERSHIP’ IN GAMING: Commenting on the unveiling of Nvidia’s next-generation RTX 20xx series of gaming graphics processors based on the new Turing architecture, B. Riley FBR analyst Craig Ellis argued that the launch breadth and pricing offer positive short- and long-term revenue growth implications. The analyst noted that Nvidia’s shares appear to be rebounding from a post-second quarter results and third quarter guidance dip, though in his view still significantly underappreciate Turing’s potential as well as longer-term Auto and Data Center Platform Group benefits. Ellis reiterated a Buy rating and $300 price target on the stock. Meanwhile, JPMorgan’s Sur told investors in a research note of his own that he believes the new GPUs will “solidify” the company’s leadership position in gaming, as its nearest competitor does not have new GPUs planned for introduction this year, and drive a “strong upgrade cycle.” Additionally, with a large installed base of older GeForce GPUs, the analyst anticipates not only upgrades to Nvidia’s GPU platforms but also PC system upgrades and two to four times more PC DRAM memory versus prior generation platforms. Sur reiterated a Neutral rating on the shares.

Also commenting on the news, Bank of American Merrill Lynch analyst Vivek Arya said he expects the benefits of Turing across gaming and other segments to show-up in the fourth quarter, since Nvidia’s muted third-quarter sales outlook suggests it is a transitional quarter with current-generation Pascal inventory clearance. Heading into the fourth quarter, consensus is modeling only 4% quarter over quarter gaming sales growth in gaming which could prove conservative given pent-up demand for Turing and its richer ASPP, he contended. Moreover, Arya noted that the Street estimates for CY19/20 gaming growth of 9%-11% year over year could prove “ultraconservative” given the 74% of Nvidia gamers that are in prime position to upgrade per his latest PC gaming survey. The analyst reiterated a Buy rating and $340 price target on the shares.