Why This Nvidia Analyst Expects Strong Q2 Report

NVIDIA Corporation NVDA is scheduled to report its second-quarter results Wednesday after the close.

The Nvidia Analyst: Rosenblatt Securities analyst Hans Mosesmann reiterated a Buy rating and $250 price target for Nvidia shares.

The Nvidia Takeaways: Nvidia will likely beat the consensus estimates that call for earnings per share of $1.02 per share and revenue of $6.33 billion, Mosesmann said in a note.

The July quarter results will likely reveal across-the-board strength, especially in the gaming and data center segments, the analyst said.

Crypto continues to be an area of concern for investors, he said. Nividia has had success in mitigating RTX GPUs in crypto mining by limiting performance in such workloads, and this points to a much more benign crypto cycle this time, he added.

Additionally, constraints in supply are another factor that limits near-term risk, Mosesmann said.

Related Link: Why Nvidia Is Much More Than Just A Chip Stock

For the October quarter, Nvidia is expected to guide above the consensus sales estimate of mid-single digit quarter-over-quarter growth and EPS of $1.05, the analyst said.

The October quarter results will likely be driven by strong data center sales from the continued adoption of Ampere and hyperscaler spending, increased ray tracing adoption and continued momentum in the automotive segment, he said.

The focus of the earnings call will be on progress surrounding the Grace CPU/3-product strategy, the ongoing ARM acquisition hurdles and the supply chain shortage duration, he added.
"We continue to like the Nvidia story and see the company as the best-in-class AI play with growth vectors into next generation networking/DPU adoption and early-days of autonomous driving S/W kicker," Mosesmann said.

Nvidia remains one of Rosenblatt's favorite secular semiconductor plays, he added.

NVDA Price Action: At last check, Nvidia shares were down 2.59% at $196.66. 

Related Link: What 4 Nvidia Analysts Think About Its Q1 Print