Calling for faith in AI! NVIDIA's heavyweight financial report is coming, with a strong bullish sentiment on Wall Street

According to the financial news app Zhitong Finance, NVIDIA (NVDA.US) is scheduled to announce its second-quarter earnings after the US stock market closes on Wednesday. Investors' attention will be focused on the earnings and guidance. Morgan Stanley has joined the bullish camp, giving NVIDIA a "overweight" rating with a target price of $144.

Morgan Stanley believes that NVIDIA's earnings guidance will be driven by demand for its H200 chips, even though there has been a slight delay in the shipment of the Blackwell series GPUs.

Analyst Joseph Moore from Morgan Stanley stated: "At least for some customers, they are more inclined to get more Hoppers, and supply has started to decline. Therefore, even though HBM3e is constrained, supply can shift to Hopper to drive higher H200 output."

Moore mentioned that there may be "some shipments" in the next quarter for Blackwell, followed by "more substantial growth" in the quarter after. Third parties, including Super Micro Computer (SMCI.US) CEO Charlies Liang, have almost confirmed that the Blackwell series GPUs will be slightly delayed in shipment.

NVIDIA's Blackwell series is set to be launched at the company's annual GTC conference in March 2024.

Moore stated that the launch of Blackwell has been slightly delayed, but customer enthusiasm for this product line is "very high," despite other companies such as AMD (AMD.US) and Intel (INTC.US) also entering the AI accelerator market.

Moore mentioned that while there is much attention on the H200 and Blackwell products, the performance of NVIDIA's H20 GPU in the Chinese market is also drawing attention.

Explaining further, Moore said: "Based on our survey in Asia a few weeks ago, we believe that the production volume of H20 this year has increased to around 1.2 million units, with an average selling price between $13,000 and $15,000. We are not sure if they can sell all these products, but based on conversations with large-scale Chinese enterprises, the demand for H20 seems strong. Therefore, we believe that in the next three quarters, the revenue of H20 will exceed $10 billion. The gross margin of H20 is lower, partly due to the compression of gross margin guidance (another reason is the lower profit margin of Blackwell products). But we believe this negative impact has been exaggerated."

Most Wall Street Analysts Bullish

Wall Street analysts expect NVIDIA's Q2 revenue to increase by 113% year-on-year to $28.84 billion, and net profit to increase by 142% year-on-year to $14.95 billion.

NVIDIA's stock price has fluctuated ahead of the financial report, but Wall Street institutions including Citigroup, Goldman Sachs, and KeyBanc have reiterated their bullish views on the stock.

Goldman Sachs strategist Scott Rubner stated that as the NVIDIA earnings day approaches, the options market implies a potential upside of over 9% for NVIDIA's stock price.

Rubner mentioned in the report that the options market suggests NVIDIA's stock price could rise by 9.35% on earnings day, equivalent to an increase in market value of approximately $298 billion He said, "Given the widespread sell-off of US tech stocks, NVIDIA's threshold for this financial reporting season is much lower than in recent quarters."

NVIDIA, known as the "most important stock on Earth," has a weight of 6.5% in the S&P 500 index.

However, Gonzalo Asis, Vice President of Derivatives Research at Bank of America, warned that investors "may underestimate the risk of disappointing performance by NVIDIA," and a "more attractive" way to hedge this risk is not to buy NVIDIA's put options, but to buy put options on the S&P 500 index.

According to TipRanks data, overall, Wall Street analysts give NVIDIA a "strong buy" rating with an average target price of $149.89, which is 18.5% higher than the current level.

NVIDIA has risen by 8% so far this month, accumulating a 155% increase year-to-date