(Bloomberg/Carmen Reinicke) — A slew of Wall Street analysts covering Nvidia Corp. are boosting their expectations for the chipmaker’s stock ahead of its quarterly earnings release due Aug. 27.
At least nine analysts have lifted their 12-month price targets on the company this week alone, raising the average price by 3% to nearly $194, the highest on record. The level implies more than 13% upside from where shares traded at Thursday’s close, according to data compiled by Bloomberg.
“What you’re seeing is the recognition that growth at Nvidia is rock solid,” said Brian Mulberry, client portfolio manager at Zacks Investment Management. “Analysts are raising projections because they simply need to; the stock is not going to slow down.”
The boosted expectations come amid a selloff in megacap technology companies — Nvidia included — that’s pulled the S&P 500 Index from record highs. Investors are looking to take profits and reallocate to less-risky sectors of the market after several major tech stocks reached sky-high valuations. Rising doubts that the Federal Reserve will cut interest rates in September have fueled the rout ahead of Chair Jerome Powell’s Friday speech.
Nvidia’s shares were lower early Friday, starting the fourth consecutive day of losses, after The Information reported the company has asked component suppliers to halt production related to its H20 AI chip designed specifically for the Chinese market. Still, the stock remains up nearly 30% from the company’s last earnings release at the end of May. In the roughly 70% rally from the April tariff-tantrum selloff, Nvidia contributed more than 180 points to the S&P 500’s gain, more than any other member.
Given the stock’s weight in the S&P 500 Index — it’s the largest constituent — and its importance in the artificial intelligence trade, Nvidia has long endured incredibly lofty expectations from Wall Street analysts and investors alike. So far, the earnings season has signaled positive read-throughs for the chipmaker’s quarterly results as megacap technology companies including Meta Platforms Inc., Microsoft Corp., Alphabet Inc. and Amazon.com Inc. increased pledges for billions of dollars in capital expenditures. Nvidia, which derives some 40% of revenue from those four companies, is likely a main beneficiary.
Analysts expect the company to report yet another quarter of double-digit revenue growth next week. While questions still remain around Nvidia’s ability to sell in China, any update should lead to upside.
“China is already de-risked in Street models, and the goal here is to get China to build on NVDA’s platform,” Cantor Fitzgerald analysts led by CJ Muse wrote in an Aug. 18 note lifting their price target to $240 from $200. “Any progress here should be well-received.”
Other firms boosting Nvidia price targets this week include Wedbush, KeyBanc, UBS, Morgan Stanley and Susquehanna. Nearly 90% of analysts covering Nvidia give its shares a buy-equivalent rating, according to data compiled by Bloomberg.
Of course, sky-high expectations mean any miss on Nvidia’s part could spark a selloff that would move the entire market.
“It could have a very outsized impact if there were some type of a disappointment,” Mulberry said. “It’s just the likelihood of them disappointing expectations is very low.”
(Updates stock moves at market open. Adds details throughout. An earlier update corrects spelling of Morgan Stanley in 9th paragraph.)
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