According to predictions by Wedbush Securities, Nvidia Corp. NVDA is poised to report another strong quarter of earnings, propelled by the current surge in AI spending.
What Happened: In a CNBC interview on Monday, Wedbush Securities expressed continued confidence in the Jensen Huang-led chip giant ahead of its second-quarter earnings announcement on Aug. 28. The firm had earlier projected a $1 trillion “tidal wave” of AI spending, which is now in full effect.
Wedbush’s SVP of equity research, Matt Bryson, attributed the recent drop in Nvidia shares to worries about diminishing demand for the company’s AI chips and potential problems with Blackwell, its upcoming GPU. However, he pointed out that many of Nvidia’s key customers, including Foxconn and Supermicro, have reported strong profits, partially due to increased AI investment.
“What’s fueling it is there’s still a ton of spending on the AI chips that Nvidia makes,” Bryson pointed out.
Despite some analysts’ doubts about Nvidia’s success, Bryson maintains a “buy” rating for the company, expecting another strong quarter.
He noted, “There just doesn’t seem to be any change in momentum from their customer base.”
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Why It Matters: The upcoming earnings report from Nvidia could be a turning point for the company. Investors worldwide are eagerly awaiting insights from CEO Jensen Huang on the future demand for AI chips through 2025.
Despite concerns about the timing of the Blackwell GPU launch, Goldman Sachs remains bullish on Nvidia’s long-term growth trajectory, particularly driven by strong demand from cloud service providers (CSPs) and enterprises for artificial intelligence.
Former Google CEO Eric Schmidt highlighted Nvidia as a key player in the AI market, noting that large tech companies are planning substantial investments in Nvidia-based AI data centers, potentially costing up to $300 billion.
Price Action: On Tuesday, Nvidia was trading at $129.16, which is 0.65% lower than its Monday’s close of $130.00, according to Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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