Nvidia Analyst Lifts Price Target Ahead Of Q1 Results: 'Should Warrant A Meaningful Premium vs Semiconductor Peers'

Nvidia Corp. NVDA is scheduled to report first-quarter results Wednesday after the market close.

The chipmaker is widely expected to report earnings per share of $0.92, lower than the year-ago's $1.36 per share. Revenue is expected to plunge 21.40% year-over-year to $6.52 billion.

An analyst at KeyBanc Capital Markets on Monday upped the price target for Nvidia's stock.

The Nvidia Analyst: John Vinh from KeyBanc maintained an Overweight rating on Nvidia shares and raised the price target from $320 to $375, suggesting an incremental 20% upside from current levels.

The Nvidia Thesis: Supply will likely limit the more meaningful near-term upside for Nvidia's data center GPUs, including A100 and H100, Vinh said. The analyst sees a modest miss for the Gaming business due to the disappointing launch of the RTX4070.

That said, the analyst expects investors to look through these concerns. The optimism is premised on Nvidia being the best-positioned semiconductor company this year, he said.

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Vinh is of the view that Nvidia has a dominating positioning in generative artificial intelligence. The company will also benefit from multiple new product cycles across both data center and gaming, he added.

Nvidia's valuation framework is aggressive, the analyst said, adding that the new $375 price target is based on 31 times the company's long-term earnings power of $12. "We believe NVDA's outsized share position and ability to monetize growth in generative AI at 70%+ gross margin should warrant a meaningful premium vs. its semiconductor peers," he said.

Nvidia Price Action: In premarket trading on Monday, Nvidia shares fell 0.78% to $310.20, according to Benzinga Pro data.

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