These 2 Analysts Just Raised Their Expectations For NVDIA - Here's Why

Nvidia Corp NVDA stock remains the cynosure of analyst attention ahead of its highly-awaited quarterly earnings.

Rosenblatt analyst Hans Mosesmann reiterated Nvidia with a Buy and raised the price target from $600 to $800.

Nvidia prints its July quarter next week, August 23, and the analyst expects a beat and guidance boost (up Q/Q) reflecting severe constraints on H100 Hopper platforms. 

He believes demand over the next several quarters exceeds supply by at least 50%. 

Unconstrained, Mosesmann believes Nvidia’s FY25 (CY24) earnings would be in the high teens from his current $10.35 estimate. 

The analyst sees FY26 (CY25) earnings power well into the $20s driven by many growth vectors: Hopper, Grace Hopper CPU/GPU, Hopper Next, Mellanox tie-ins (switches, DPUs, NICs). 

Mosesmann estimates Q2 revenue of $11 billion vs the consensus of $11.1 billion. His EPS of $2.04 stacks against the consensus of $2.07.

The analyst estimates Q3 revenue of $11.6 billion vs the consensus $12.4 billion. He projects EPS of $2.15 vs. consensus of $2.34.

During the early innings, the analyst views NVDA as a high-conviction story thriving amid uncertainty given secular AI, autonomous driving, and metaverse tailwinds. The price target reflects NVDA’s best-in-class software capabilities enabling multi-year earnings expansion even as competition intensifies. The current levels do not reflect NVDA’s competitive moat and growth prospects.

Oppenheimer analyst Patrick Scholes maintained Nvidia with an Outperform and raised the price target from $420 to $500.

Supply curbs near-term growth. NVDA is benefiting from broad, robust AI demand. 

Reports indicate China CSPs ordered $1 billion of A800 this year and another $4 billion next year ahead of a potential U.S. export ban. Burgeoning GPU demand is constrained by advanced CoWoS packaging tightness, though management has procured “significant” second-half capacity to help bridge supply demand. DGX Cloud provides another cloud revenue stream. 

The gross margin will likely expand by 323bps Q/Q to 70%. Scholes sees ample room for continued mix-led expansion. 

NVDA accelerators (L4, L40, H100 NVL, and Grace-Hopper) address the gamut of AI inference workloads. New Grace and GH200 Grace Hopper superchip will likely add second-half upside. Scholes estimates datacenter up 85% Q/Q (+108% Y/Y) in 2Q and doubling in CY23. 

He sees gaming returning to >$10 billion/year run-rate in 2Q. He expects gaming to be up ~5% Q/Q in 2Q.

Scholes estimates that auto is down 5% in F2 as China xEV remains soft. Recently passed China subsidies are a potential catalyst. He sees auto as NVDA’s third growth pillar long-term—Pipeline is now up to $14 billion (from $11 billion). 

Scholes estimates revenue of $11.1 billion in Q2 and $12.4 billion in Q3. His Q2 EPS of $2.07 stacks against Q3 EPS of $2.34.

Price Action: NVDA shares traded higher by 0.05% at $435.04 on the last check Thursday.