Nvidia Analysts Rush to Update Price Targets Before Earnings

Nvidia stock

Nvidia (NASDAQ:NVDA) shares surged in early Monday trading, edging closer to their March all-time high, as analysts hurriedly revised their price targets for the world’s leading AI-chip maker ahead of its highly anticipated first-quarter earnings report later this week.

Having initiated the current AI revolution last year with a remarkable revenue forecast linked to a surge in demand for its benchmark H100 processors, Nvidia has witnessed a remarkable surge in market value, adding over $1.5 trillion in the past 12 months and emerging as one of the top-performing stocks of 2024 with an 88% gain.

Analysts anticipate the chipmaker, known for its semiconductors catering to gaming and automotive industries alongside its AI prowess, to report a net income of $13.2 billion, or $5.63 a share, for the three months ending in April. This marks a fivefold increase from the year-earlier period, with a gross profit margin of approximately 77%, 10 percentage points wider than the same period last year.

Group revenues are estimated at $24.6 billion, tripling last year’s first-quarter tally, with quarterly sales projected to exceed the $30 billion milestone by the end of its current financial year, concluding in January.

Forecasts suggest a staggering 400% surge in data-center revenue, the group’s primary revenue contributor, reaching $21.26 billion. Gaming revenue is expected to rise by 20% to $2.68 billion, while automotive revenue is predicted to remain relatively stable at $296.4 million.

Stifel analyst Ruben Roy raised his Nvidia price target by $175 to $1,085 per share, emphasizing sustained demand for H100/H200 amid increasing anticipation surrounding Blackwell, the company’s upcoming line of AI graphics-processing units scheduled for later release this year.

Barclays analyst Blayne Curtis, boosting his Nvidia price target by $250 to $1,100 a share, also sees a surge in near-term sales driven by pricing power from the group’s H100 and H200 GPU offerings. Curtis and his team anticipate over $1 billion in upside in April and $2 billion in July, driven partly by the introduction of H200, set to commence shipping in the July quarter.

Looking ahead, Curtis highlights the significant revenue potential from the ramp of the GB200, an advanced series of AI-focused processors offering double the speed of Nvidia’s current H100 and H200 chips, alongside enhanced energy efficiency and flexibility.

Analysts project an average selling price approximately 40% higher than the current range for H100 chips, which typically fetch between $30,000 and $40,000 each.

Baird analyst Tristan Gerra echoes this sentiment, emphasizing Nvidia’s unmatched product offerings for this year and next, coupled with shortened lead times, which are poised to bolster market share in the latter half of the year. Gerra lifted his Nvidia price target by $150 to $1,200, alongside upward revisions to GPU unit shipment forecasts for this year and the next, maintaining an ‘outperform’ rating on the stock.

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