Nvidia: Analysts Stand Firm Despite Earnings Jitters
The anticipation surrounding Nvidia Corp. (NVDA) ahead of its earnings report this Wednesday is heating up, and despite some jitters among investors, Wall Street analysts are throwing their support behind the artificial intelligence chip maker’s stock. Let’s dig into the analysis, chart trends, and potential price movements for the savvy traders out there!
Analyst Ratings Remain Strong
Even with expectations that Nvidia’s upcoming revenue won’t surpass the extraordinary highs of previous quarters, major firms including Evercore ISI Securities, Piper Sandler, and Truist Securities are reaffirming their bullish stances.
Harsh Kumar from Piper Sandler anticipates Nvidia will outpace revenue expectations by about $1.8 billion this quarter. He perceives the company’s current stock price as attractive, maintaining a robust price target of $175. Kumar believes Nvidia’s trajectory will only climb as they transition further to their new Blackwell platform, which is still in limited supply at the onset.
The Transition to Blackwell
Nvidia is currently navigating a complex transition period as they move to the Blackwell architecture, while also continuing sales for the previous Grace/Hopper chip line. Some analysts, like Mark Lipacis from Evercore ISI, have projected that the ramp-up of the new technology will take until mid-2025, which markets are viewing with moderate concern. Yet even this delay is not seen as detrimental for Nvidia in the long-term framework.
Many hyperscalers (large data center operators) are expected to push their purchases of Nvidia products into later periods. However, the ongoing demand for Nvidia GPUs remains a crucial point. As Lipacis states, “many noted demand for Nvidia graphics processing units still outstrips supply, and absent B100 availability, Nvidia’s current solution, H100 would be purchased instead.”
Market Reactions and Price Targets
Despite a decline of 2.8% in Nvidia’s stock recently, marking three consecutive days of losses, analysts urge caution. William Stein from Truist highlights that trading at approximately $134, Nvidia looks “quite cheap.” His meticulous analysis reveals that the stock is currently positioned at 23 times fiscal 2026 estimates, justifying his price target of $204.
Moreover, Stein suggests that while investor expectations have centered around large revenue beats in the past, this quarter might deviate from the pattern, aiming instead for a consensus sales figure of around $38.08 billion and earnings per share of 83 cents.
DeepSeek Concerns and Future Outlook
Traders are still digesting the implications of DeepSeek’s announcement regarding cost-effective AI servers built on older Nvidia chips. While some are jittery about this development, several tech giants including Amazon and Alphabet have augmented their AI capital expenditure plans for 2025, pointing to sustained industry confidence moving forward.
Moreover, Lipacis remarks that amidst concerns regarding DeepSeek, there’s a strong consensus from AI engineers that the cost improvements achieved are “evolutionary rather than revolutionary.” This offers a solid rationale for sticking with Nvidia through potential short-term volatility.
The Bottom Line: Time to Consider Nvidia?
As traders, we are all about momentum and living in the now. Nvidia, priced at 30 times earnings estimates for the upcoming year, appears to be one of the most undervalued AI stocks on the market right now. According to Lipacis, a small earnings beat coupled with optimistic commentary on the Blackwell platform in the second half of 2025 could act as a significant catalyst, pushing the stock towards his targeted $190.
In conclusion, while immediate market reactions can sometimes sow doubt, the foundational strength and demand surrounding Nvidia’s offerings suggest that there are still ample opportunities for long-term gains. Keep your eyes peeled on the earnings report, but don’t forget to factor in the long-term trajectory that this powerhouse has laid out!
Stay sharp, traders! With these insights, you’re empowered to make actionable decisions in the electric world of stock trading!
