Top Nvidia Analyst Sees No Major Impact From Blackwell Delay, But Flags One Caveat He's Wary About Ahead Of Earnings

Street’s much-awaited earnings report is almost upon us, and artificial intelligence stalwart Nvidia Corp. NVDA is widely expected to clear the lofty goals. Ahead of the results, an analyst at Morgan Stanley said he is comfortable with the “high expectations.”

The Nvidia Analyst:

Joseph Moore has an Overweight rating and a $144 price target for Nvidia shares.

The Nvidia Thesis:

Nvidia stock has fairly weathered concerns surrounding potential delays in Blackwell shipments, said Moore in a note released late Sunday. Near-term business is strong and Blackwell ramp-up will likely happen this year as per initial guidance, he said.

Moore expects some volume in October and a more material ramp-up in the January quarter. The management is likely to stick to its script and say “they are on track to volume” and potentially not even acknowledge tactical setbacks, he said.

Why Blackwell Delay Shouldn’t Matter

The shift in the timing of Blackwell shipment doesn’t matter very much, as supply and customer demand have rapidly pivoted to H200, the analyst said. “Customer enthusiasm for Blackwell is at very high levels, but the utility of a small volume of Blackwell in the initial ramp phase is somewhat lower,” he said.

Moore said it will take time for Blackwell’s demand from cloud businesses to pick up, adding that Hopper is seeing exceptionally strong demand from this end market. At least some hyper scalers may prefer to get more Hoppers as they will need high-volume clusters of Blackwell to get relevant outcomes, he said.

See Also: How To Buy Nvidia (NVDA) Stock

H20 – Margin Dampener?

The H20 ramp-up, Moore said, is also a meaningful contributor. H20 is the China-specific AI accelerator of Nvidia that helps the company to sidestep the U.S. ban on China chip exports. Citing checks in Asia, the analyst said H20 builds have increased to about 1.2 million units for the year, at an average selling price of $13-15k.

Accordingly, the H20 could fetch more than $10 billion in revenue over the next three quarters, Moore said. The analyst also said fears of margin compression due to the low-cost H20s are getting blown out of proportion. “If H200 has 80% gross margins at $22k, that would imply cost of sales of about $4400; if H20 has 20% lower costs, or about $3600, then the average selling price of $14k would still drive about 74% gross margin, much higher than some of the bear cases,” he added.

The Risk

Moore pointed to climbing investor expectations as the only caveat. The analyst said for the stock to remain unchanged, the company has to guide in the $33 billion to $34 billion range for the fiscal third quarter.

“We are generally comfortable with high expectations and expect visibility to improve as new products ramp,” he added.

Q2 Expectation

Here’s a compilation of Morgan Stanley’s estimates for the second and third quarters and fiscal year 2025 versus the consensus:

	Q2’25	Q3’25	FY25
Revenue	$28.17B	$30.22B	$152.65B
Gross margin	75.6%	75.7%	75.1%
EPS	63 cents	68 cents	$3.53

In premarket trading, Nvidia shares rose 0.54% to $127.14, according to Benzinga Pro data.

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Image via NVIDIA