Citi Expects Big Things From NVIDIA (NASDAQ:NVDA) at CES 2021

It's easy to forget, this time of year—especially the way the last year or so has been going—that one of the biggest events in gadgetry is about to hit. Specifically, it's the Consumer Electronics Show (CES), where all the best and brightest in gadgets make an appearance. Already, some are looking to NVIDIA (NASDAQ:NVDA) to put on a great show and gain substantially in its share price accordingly.

One Major Dog and Pony Show

The latest reports out of Citi gave NVIDIA a little extra firepower, as Citi added the company to its “Catalyst Watch” list. Citi's looking for NVIDIA to pick up steam thanks to the big show in Las Vegas, which would be welcome for NVIDIA as the company's seen a bit of a slump lately.

Interestingly, reports suggest that Citi did much the same thing last year, adding NVIDIA to the Catalyst Watch list just ahead of the 2020 CES event, though the event didn't turn out quite as expected that year. This year may not prove to be much better, as this year's event will be completely digital.

However, despite the change in format, NVIDIA is still expected to bring out some of its new innovations during the event, and what's on tap is said to be quite exciting. The company is set to run a livestream event dubbed “GeForce RTX: Game On”, and will focus primarily on NVIDIA's advancements in graphics cards. Reports suggest that, given the presenter—it's set to be GeForce's senior vice president Jeff Fisher rather than NVIDIA's CEO Jensen Huang—the event will focus mainly on software rather than hardware. It's a safe bet, however, that hardware will be involved on at least some level; the NVIDIA 30 Series mobile GPUs are expected to be revealed at the event.

Analysts Already Optimistic

Much of the analyst community is already on board with NVIDIA, based on our latest research. The company has already enjoyed a consensus “buy” rating for the last six months, with proportions changing surprisingly little in the interim. Six months ago, the company had four “sell” ratings, five “hold” and 30 “buy”. Today, that ratio has shifted to four “sell” ratings, three “hold” and 28 “buy”, suggesting that five analysts simply stopped covering the company.

As for price targets, that number only goes up as well. Six months ago, the company was sitting at $360.47 on average. Today, it's sitting at $545.25. Given that the company is currently trading at $527.01 as of this writing, it's clear that the price targets are a solid reflection of reality and further gains may be coming up.

Potential Impact May Be Light

Expecting CES 2021 to deliver a huge gain for NVIDIA may honestly be asking too much. The problem in a nutshell is that, since CES 2021 is all-digital this year thanks to the impact of coronavirus, the ability to really see what the graphics-heavy company can produce is inherently limited.

Let's say, for example, someone shows off a television with absolutely flawless clarity of image. If you're in the room with that television, you'll see it perform exactly as advertised. You'll probably pull out your wallet right there and demand someone take your money. Now, let's take that same television and show it operating on your computer monitor at home. The best resolution you'll see it operate at is the best resolution your monitor can produce. The effect will automatically be diminished because you cannot see it operating as intended. For NVIDIA, whose primary focus is graphics, that could be a problem. Worse yet, since the event is streaming, issues of internet connectivity will come into play; people operating on DSL connections will be similarly limited.

The good news, however, is that it may not matter.  NVIDIA hardware is already highly-prized. We saw as much with the recent release of the RTX 3080. These cards proved almost impossible to buy when they were released—almost like the PlayStation 5 and Xbox Series X systems—and haven't become much more widely available since. This isn't just related to gaming, though. Graphics cards are the primary means to mine for common cryptocurrencies, particularly Bitcoin. Bitcoin has enjoyed a massive run-up in price lately to the point where even folks who mortgaged their houses to buy in at $19,000 are likely pretty happy about their purchases.

All NVIDIA has to do at this point is keep the hardware coming at a rate that accommodates not only demand from gamers, but also from cryptocurrency miners eager to get ahead. That's likely to drive the company forward, and make it live up to Citi's “Catalyst Watch” listing in every particular.