Even during global crises, there will always be winners. With a pandemic ravishing the global economy worldwide, Nvidia (NVDA) has managed to sail through the crisis relatively unscathed. Investors have responded in kind and have sent the stock up by 30% year-to-date.

There are a number of reasons for the strong performance, including being well placed to cater for the stay-at-home environment on several fronts. Nvidia’s heavy exposure to the gaming sector, along with Datacenter and its evolving AI segment, are all secular trends acting in its favor.

But Susquehanna’s Christopher Rolland believes there is one particular reason to be very bullish when considering the GPU’s leader’s prospects.

Last week, after a protracted process pending regulatory approval, Nvidia closed its acquisition of Israeli data center company Mellanox, in a deal worth $6.9 billion.

“We view this deal as a major coup for NVIDIA,” said Rolland, “NVIDIA not only received a wonderful financial asset, but also a fantastic strategic asset as the technical synergies will allow the company to better address networking technologies used in building holistic A.I., HPC and hyperscale systems.”

In February, Rolland predicted that whatever the outcome, Mellanox shareholders were in a win-win situation, either way. On the one hand, the deal’s approval would lead to “a 10% annualized return.” However, if the deal fell through, Mellanox would be worth “substantially more as a stand-alone.” But, eventually, as evidenced on all fronts in 2020, Nvidia emerged the clear winner, as following Mellanox’s recent big Q1 earnings beat, Rolland views “the Mellanox asset to be worth well more than what NVIDIA paid.”

Rolland believes the new addition will contribute roughly $0.40 of accretion for NVIDIA in C2020 and approximately $0.65 of accretion in 2021.

Consequentially, the 5-star analyst keeps a Positive (i.e. Buy) rating on Nvidia shares, while raising the price target - from $330 to $355 to “reflect the accretion.” Investors could be pocketing a 17% gain over the coming months, should Rolland’s forecast materialize. (To watch Rolland’s track record, click here)

All in all, the Street backs up the Susquehanna analyst’s call. The analyst fraternity rates Nvidia a Strong Buy based on 26 Buys, 5 Holds and a lone Sell. Yet, a lot of the optimism is already baked into these analysts' expectations. The 12-month average price target of $308.65 boasts potential upside of just 1% and a change from current levels. (See Nvidia stock analysis on TipRanks)

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