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Expectations are high ahead of Nvidia’s earnings Wednesday.
Dreamstime
Nvidia
’s
second-quarter earnings next week are hotly anticipated, to say the least. Wedbush analyst Matt Bryson thinks the chip maker will report another set of blowout results, but said the amount of outperformance may not even matter.
The analyst said he expects
Nvidia
(ticker: NVDA) to beat expectations and offer a “robust forward outlook,” when it reports Wednesday. The company is so dominant in AI, Bryson said, that Nvidia’s results and forecasts won’t even need to reach the high end of Wall Street’s expectations to satisfy investors. If the forecasts for the current quarter are less upbeat than hoped, he said, the market is likely to look ahead to potential strength in coming quarters.
“With demand for AI training having lifted substantially in the past quarter and with no other silicon supplier now capable of providing part volumes within an order of magnitude of Nvidia’s output, we believe any unfilled demand will just be pushed into forward quarters fueling future sales and EPS,” he said.
Bryson added that Wedbush remains “extremely bullish” on the company’s intermediate term future. He maintained an Outperform rating on the stock with a target of $490 for the price, a call that implies a gain of 13% from Thursday’s closing level.
Nvidia has racked up a number of price-target increases from Wall Street in recent days as attention has turned to its earnings. Near-term demand for its chips in the data-center business, as well as a boost in orders from Chinese companies worried about tighter restrictions ahead, have been among the reasons.
Piper Sandler analyst Harsh Kumar cited both factors when he raised his price target to $500 from $450 earlier this week.
Bryson and Kumar aren’t even at the more bullish end of the scale on Wall Street. The average price target for Nvidia is $529.60, according to FactSet data.
The stock, which had surged 197% in 2023 as of Thursday’s close, was 3.7% lower at $417.40 in early trading on Friday.
Write to Callum Keown at [email protected]
Source: https://www.barrons.com/articles/nvidia-earnings-ai-dominance-stock-1f7ea50c?siteid=yhoof2&yptr=yahoo