Nvidia Stock Hits Three IBD Stock Screens

Graphics-chip maker Nvidia (NVDA) expects to close its acquisition of Mellanox Technologies (MLNX) by April 27 now that Chinese regulators have approved the $6.9 billion deal following a lengthy review. Nvidia stock dipped on Friday.


Wall Street analysts say the acquisition will increase Nvidia’s exposure to the high-performance computing market.

“This moves Nvidia even further beyond a chip supplier to being a true HPC and exascale computing platform supplier,” UBS analyst Timothy Arcuri said in a note to clients Thursday. Exascale computing refers to computing systems capable of at least one exaflops, or a quintillion calculations per second.

Arcuri reiterated his buy rating on Nvidia stock and raised his price target to 330 from 305.

Nvidia Stock Retreats To Buy Zone Of Prior Breakout

On the stock market today, Nvidia stock slid 0.8% to 292.32.

Nvidia stock on Friday retreated to the 5% chase zone of its recent breakout. On April 7, it broke out of a second-stage cup-with-handle base at a buy point of 275.50, according to IBD MarketSmith charts.

Nvidia announced its plan to buy Israel-based Mellanox for $125 per share in cash on March 11, 2019. China’s State Administration for Market Regulation approved the acquisition on Thursday. That go-ahead was the final government approval needed after it cleared the U.S. and European Union.

Nvidia said the acquisition will be immediately accretive to its adjusted gross margin, earnings per share and free cash flow.

Combination Delivers Trifecta Of Technology

Nvidia and Mellanox have a long history of collaboration. Their union will combine Nvidia’s graphics processing unit, or GPU, computing platform with Mellanox’s high-speed interconnects. Together the two companies already power over 250 of the world’s top 500 supercomputers and serve every major cloud computing service provider.

The combination should help Nvidia as it prepares to launch its 7-nanometer Ampere data-center product, Arcuri…

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