"Don't pay attention to the noise!" Wall Street remains confident in NVIDIA

According to Zhitong Finance APP, although some investors may have higher expectations for NVIDIA (NVDA.US), the vast majority on Wall Street remain very satisfied with the company, which recently announced its third-quarter performance and guidance, highlighting its dominant position in the artificial intelligence spending boom.

In pre-market trading on Thursday, the stock rose slightly by 1.34%. Other semiconductor companies, such as AMD (AMD.US), ARM (ARM.US), ASML (ASML.US), TSMC (TSM.US), and Intel (INTC.US), experienced slight declines.

Stacy Rasgon, an analyst at Bernstein, wrote in a report to clients, "NVIDIA's third-quarter performance was very stable... With strong ongoing demand for Hopper products, their data center revenue reached a record $30.8 billion (Wall Street expected $29.1 billion), and sales of H200 grew to the tens of billions."

After the earnings announcement, Rasgon raised the target price from $155 to $175, stating that although bears may point out "below general expectations," declining connectivity rates, and a drop in gross margins next year, considering supply constraints and potential conservatism, this is still "considerable."

"There is very high demand for Blackwell products, and this demand may exceed supply for some time to come. With strong growth in the data center business, the outlook for the data center market over the next year is very optimistic, which is a significant positive for NVIDIA," Rasgon continued, maintaining an 'outperform' rating on NVIDIA.

"While Jensen Huang will continue to lead the company in his own way, he does not seem worried that demand for computing power will decrease anytime soon, and the complexity of what the company is accomplishing continues to greatly widen their moat, rather than that of competitors. Overall, NVIDIA's story still looks intact."

Analyst Michael Delmont stated that the results were "incredible," noting that companies like Microsoft (MSFT.US), Amazon (AMZN.US), Tesla (TSLA.US), and Google (GOOGL.US) have invested hundreds of billions in AI infrastructure.

He stated in an email, "I don't think the demand for these GPUs will slow down anytime soon, whether it's H100/H200 or B100."

Performance

Looking ahead to the fourth quarter of fiscal year 2025, NVIDIA expects revenue to reach $37.5 billion, with a fluctuation of 2% up or down. Analysts had previously estimated revenue at $37.1 billion. However, some buyers estimate that revenue for the next quarter could be as high as $41 billion.

The company also indicated that it expects demand for Blackwell to exceed supply in several quarters of fiscal year 2026. In the upcoming fourth quarter of fiscal year 2025, shipments of Hopper and Blackwell will continue, although both are expected to face "some supply constraints." NVIDIA added during its earnings call that the revenue from its Blackwell product line is expected to exceed expectations, with profit margins projected to reach around 75% after improvements.

More Praise

Piper Sandler analyst Harsh Kumar stated that considering NVIDIA is undergoing a product transformation, the company's expectations may be relatively conservative.

"We suspect that NVIDIA's visibility will extend for most of 2025," Kumar wrote. He reiterated his overweight rating and a target price of $175. "We still believe that the pace of exceeding expectations will far exceed the $2 billion pace that NVIDIA has more or less maintained since April."

Bank of America analyst Vivek Arya indicated that due to a "lack of momentum," NVIDIA's stock price may experience "volatility" in the short term, but NVIDIA remains the undisputed leader in transitioning traditional infrastructure valued at $1 trillion to accelerated systems. It is also the fastest-growing large-cap stock, with "stable" free cash flow that should "provide ample firepower for cash returns and inorganic investments." He reiterated his buy rating and a target price of $190.

Citi analyst Atif Malik reiterated his buy rating and a target price of $175, initiating a 90-day upward catalyst watch based on Jensen Huang's keynote speech at the Consumer Electronics Show in January.

Malik wrote, "We expect management to raise sales expectations for the Blackwell products in January (Jan-Q); to see a low point in gross margins in April (Apr-Q); and to discuss AI robot inference-guided turning points in warehousing, manufacturing, and humanoid robotics."

Kumquat Research analyst Jeremy took a more moderate stance, stating that the demand for hyperscale computing shows no signs of slowing down, resulting in strong performance. He mentioned in an email, "In this AI-driven market, NVIDIA remains a stock worth holding, but its invincible aura may be showing signs of cracks."