TLDR
- Nvidia reports Q1 FY26 earnings on May 28 after market close, with Wall Street expecting earnings of $0.73 per share and revenue of $43.28 billion
- Top analysts from Oppenheimer, Cantor Fitzgerald, and other major firms maintain Buy ratings on NVDA stock ahead of earnings
- Institutional investors remain underweight in tech stocks with $7 trillion in cash on sidelines waiting for positive catalyst
- NVDA stock has rebounded 40% over seven weeks but still trades 14% below January record high at current P/E of 28
- Analysts expect average price target of $164.51 represents 25.3% upside potential from current levels
Nvidia faces a crucial test Wednesday when it reports first-quarter earnings after market close. The chip giant’s results could unlock massive investment flows as institutional investors sit on roughly $7 trillion in cash funds.
Wall Street expects earnings per share of $0.73, up from $0.61 a year ago. Revenue projections call for a 66% jump to $43.28 billion.
The stakes are high for the $3.2 trillion company. Nvidia serves as a bellwether for artificial intelligence demand across the tech sector.
BBVA strategists say institutional positioning in US technology remains “undemanding.” Hedge funds and mutual funds stay substantially underweight in the sector.
Commodity Trading Advisors show neutral exposure to broader stock markets. Volatility control funds have room to increase risk positions.
“With institutional length in equities far from exuberance levels,” the setup favors higher stock exposure, according to BBVA’s Michalis Onisiforou.
NVDA stock has recovered about 40% over the past seven weeks. The rally followed Saudi Arabia’s push into AI infrastructure development.
Analyst Sentiment Remains Strong
Top-rated analysts maintain bullish stances heading into earnings. Oppenheimer’s Rick Schafer reiterated his Buy rating despite export restriction concerns.
Schafer expects limited impact from US export restrictions on China. Nvidia announced a $5.5 billion charge related to H20 chip restrictions in April.
His confidence stems from GB200 rack-scale production recovery. The Blackwell 200/300 unit ramp-up targets 40,000 units this year.
Cantor Fitzgerald’s C.J. Muse calls the earnings report a potential turning point. He anticipates clear visibility into revenue reacceleration for the second half of 2025.
Muse believes China impact will be offset by strong Blackwell product line momentum. Major firms including Stifel, Bank of America, and KeyBanc maintain Buy ratings.
Technical Picture Shows Mixed Signals
NVDA shares trade about 14% below their January record high. The current price-to-earnings ratio of 28 sits well below the five-year average of 40.
However, the recent rally has pushed shares near overbought levels. This creates what Onisiforou calls “a challenging backdrop for the earnings report.”
Retail investor demand briefly weakened before reviving after Moody’s debt downgrade news. Individual investors have consistently bought stock market dips this year.
The S&P 500 rallied from April lows on trade tension optimism. Last week’s decline reflected fiscal deficit worries and renewed tariff concerns.
TipRanks data shows 34 Buy ratings, four Holds, and one Sell among recent analyst coverage. The consensus price target of $164.51 implies 25.3% upside potential.
Key focus areas include Blackwell architecture ramp-up progress and supply chain visibility. Forward guidance for full-year revenue targeting $198.8 billion will be critical.
Export restriction impacts on China operations remain a key concern. Nvidia continues developing compliant chips for the Chinese market.
The earnings report comes as NVDA stock closed at $131.29, down 1.16% in the most recent session. Pre-market trading showed gains of 2.41% to $134.46.
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