Chip manufacturer Nvidia (NVDA) has provided a slightly optimistic outlook for its fiscal first-quarter guidance, according to analysts on Wall Street.
Nvidia exceeded expectations with its fiscal fourth-quarter results and offered guidance above market projections.
Vijay Rakesh, an analyst at Mizuho Securities, described Nvidia’s forecast as “a Goldilocks guide,” striking the right balance for investors.
Following this announcement, Nvidia’s stock surged by over 13% to reach 767.48 in morning trading, reclaiming its position in record high territory after a recent decline.
The ripple effect of Nvidia’s report was felt positively by data-center computer manufacturer Super Micro Computer (SMCI), commonly known as Supermicro, whose shares climbed by 19.6% to 878.24 during Thursday’s morning trading session.
Sustained Strong Demand Expected Through 2025
During an analyst conference call, Nvidia’s CEO Jensen Huang expressed confidence in the continuous demand for the company’s artificial intelligence processors.
Huang stated, “Fundamentally, the conditions are excellent for continued growth from calendar 2024 to calendar 2025 and beyond,” highlighting the expectation of demand outpacing supply.
Nvidia’s growth is being primarily driven by two industry trends: generative AI and the shift towards accelerated computing from conventional computing methods.
In the fiscal fourth quarter ending on Jan. 28, Nvidia reported a remarkable 486% year-over-year increase in earnings, amounting to an adjusted \(5.16 per share, while sales soared by 265% to \)22.1 billion.
Looking ahead to the current quarter, Nvidia anticipates adjusted earnings of \(5.41 per share on sales totaling \)24 billion. This forecast surpasses analysts’ expectations of \(5.02 per share earnings on \)22.2 billion in sales for the fiscal first quarter. In the same period last year, Nvidia recorded adjusted earnings of \(1.09 per share on sales of \)7.19 billion.
Upward Revisions in Nvidia Stock Price Targets
Approximately 19 Wall Street firms have raised their price targets for Nvidia stock in response to its surging performance.
TD Cowen analyst Matthew Ramsay reiterated his outperform rating for Nvidia stock and increased his price target from 700 to 900.
Describing it as “another blowout quarter for Nvidia,” Ramsay expressed his positive outlook in a client note.
Goldman Sachs analyst Toshiya Hari maintained his buy rating for Nvidia stock and raised the price target to 875 from 800.
Hari highlighted Nvidia’s strong performance in the Data Center segment as a key driver of growth and emphasized the continuous investment in generative AI infrastructure by cloud service providers and consumer internet companies. Additionally, he noted the expanding adoption of AI by enterprise clients and governments.
Furthermore, Hari mentioned the potential growth catalysts from new products such as the H200 data-center graphics processing unit and Spectrum-X networking system.
Nvidia stock is currently featured on five IBD Lists, including IBD 50, Leaderboard, Big Cap 20, Sector Leaders, and Tech Leaders.
_For more updates on consumer technology, software, and semiconductor stocks, follow Patrick Seitz on X (formerly Twitter) at @IBDPSeitz.
