What's Going On With Nvidia Stock Friday?

Nvidia Corp NVDA stock is trading lower Friday in line with broader indexes SPDR S&P 500 SPY and Invesco QQQ Trust, Series 1 QQQ. 

The indexes opened lower on Friday on a drag from big technology and growth stocks, as evidence of a resilient U.S. economy flared fears of interest rates staying higher for longer.

At the same time, the chipmaker continues to attract analyst confidence ahead of its quarterly results.

Wedbush analyst Matt Bryson reiterated Nvidia with an Outperform and a $490 price target.

Bryson firmly believes Nvidia's future outcomes will surpass the Street's and Wedbush's current anticipations. It's not about meeting the upper end of data center expectations; it's about the bigger picture. 

Bryson asserts that even if Nvidia doesn't match the elevated anticipations, the void will be transferred to subsequent quarters, bolstering future revenue and EPS. 

This buoyancy manifests Nvidia's astonishing upside projection in their Q2 guide disclosed this past May reports.

Unraveling Nvidia's Surge: In recent months, the demand for AI training witnessed a significant uptick. Given Nvidia's unparalleled production capacity in this domain, they will likely dominate the sector, emphasized by the lack of any other silicon supplier coming close to Nvidia's production magnitude.

Conversations And Indications: Engagements with the supply chain in late June hinted at a substantial production ramp-up. Moreover, the AI GPU demand surged from hyper-scale consumers and various players, including emerging AI clouds, large enterprises, and sovereign states.

Lead Times and Launches: A closer look reveals that while NVDA H100 lead times for OEMs have seemingly stabilized, A100 lead times have increased. The expected launch of the L40s in FQ3 might somewhat ameliorate supply and sales, providing a workaround for specific production bottlenecks.

Peeking Into The Future: Bryson underlines that the colossal difference between Nvidia's AI GPU business and its competitors ensures that even if there are any supply shortfalls from Nvidia, the chances of orders migrating elsewhere in the foreseeable future are minimal. 

The investment realm will likely shift focus from present quarter anticipations to the potential for more vigorous outcomes in subsequent quarters.

Bryson estimates Q2 revenue of $11.0 billion and EPS of $2.03. He projects FY24 revenue of $41.5 billion and EPS of $7.40.

Price Action: NVDA shares traded lower by 2.65% at $421.80 on the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.