TLDR:
- Nvidia stock near record high ($148.88) but dropped 2% Monday to $144.69
- Blackwell AI chips launch in Q4, with demand exceeding supply into 2025
- Multiple analysts raised price targets (ranging from $165-$185)
- Expected Q3 earnings: $0.70 per share on ~$33-34.5B revenue
- Wall Street sees Nvidia capturing majority of $70B AI accelerator market by 2025
Nvidia stock retreated from its record high on Monday, dropping 2% to $144.69, as analysts issued a wave of bullish price target increases ahead of the chipmaker’s third-quarter earnings report next week.
The semiconductor giant reached an all-time high of $148.88 last Thursday following market optimism around Trump’s election victory. The stock’s recent strength coincided with its entry into the Dow Jones Industrial Average on Friday.
Wall Street firms have grown increasingly optimistic about Nvidia’s growth prospects, particularly regarding its upcoming Blackwell artificial intelligence chips. Piper Sandler raised its price target to $175 from $140, making Nvidia its top large-cap pick. The firm cited Nvidia’s dominant position in AI accelerators and expects the total addressable market to reach $70 billion by 2025.
Melius Research compared giving up on Nvidia after its successful Hopper chip to “giving up on Apple at iPhone 1 or 2.” The firm boosted its price target to $185 from $165, maintaining a Buy rating. UBS analyst Timothy Arcuri matched that $185 target, up from $150, projecting quarterly revenue of $34.5 billion.
For the upcoming third quarter, analysts expect Nvidia to report adjusted earnings of 70 cents per share on revenue of $32.96 billion. UBS forecasts even stronger results, with potential revenue reaching $34.5 billion and guidance for the January quarter approaching $37 billion.
The highly anticipated Blackwell architecture launch is scheduled for the fourth quarter. During its August earnings call, Nvidia indicated that demand for Blackwell chips has already exceeded supply, a trend expected to continue into 2025.
Beyond traditional tech company demand, analysts point to growing interest from national governments in what Nvidia terms ‘sovereign AI.’ UBS notes this could represent over $10 billion in revenue for 2024, with some Middle Eastern countries potentially matching the spending of major U.S. tech companies.
Jefferies research suggests Nvidia’s market position will strengthen further, estimating that servers with Nvidia data center chips will account for 66% of data center demand in 2025-2026, rising to over 80% by 2027.
Morgan Stanley maintained its positive stance, raising its price target to $160. The firm noted that supply constraints affect both the upcoming Blackwell chips and current H200 products.
Mizuho Securities increased its price target to $165 from $140, while maintaining an outperform rating on the stock. Analyst optimism extends to the company’s profitability, with gross margins remaining above 70%.
Currently, Nvidia trades at a forward price-to-earnings ratio of 38.8 times, slightly below its five-year average. This compares to multiples of around 30 times for competitors Advanced Micro Devices and Broadcom.
The stock has gained nearly 200% year-to-date, adding to its five-year return of 2,700%. Nvidia will report its fiscal third-quarter results on November 20.
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