As Nvidia (NASDAQ: NVDA) approaches its highly anticipated second-quarter earnings announcement on August 28, 2024, the tech giant continues to captivate the attention of investors.
Despite recent turbulence in the market, Nvidia’s shares have exhibited remarkable strength this year, achieving a year-to-date upswing of 151%. However, the stock experienced a decline of over 3% on August 22, bringing its price down to $125.78.
This reduction contributed to a period of mixed performance; however, Nvidia still recorded a 0.78% increase in its monthly performance, according to the latest data from Finbold as of August 23.
Despite this temporary fluctuation, several factors have reinforced Nvidia’s stock as the company approaches its earnings release.
Factors impacting impending outcomes
A major concern influencing Nvidia’s performance is the potential delay in the launch of the new Blackwell processors, anticipated to be faster, more affordable, and more efficient than previous models.
Allegations of design issues resulting in this setback have triggered short-term volatility, affecting Nvidia’s fundamentals.
Nonetheless, the excitement surrounding this upcoming product line has driven a 20% recovery in Nvidia’s stock price following the initial decline caused by global market disturbances associated with the yen-carry trade.
NVIDIA’s upcoming earnings report is expected to underscore the sustained strength of its Data Center segment, bolstered by record growth in first-quarter sales and the booming adoption of cloud-based solutions, particularly in AI computation and infrastructure.
The demand for NVIDIA’s GPUs, especially from major cloud service providers, coupled with innovations like the NVIDIA Quantum and Spectrum X800 Ethernet switches tailored for AI, is projected to significantly enhance revenue.
Additionally, the Gaming and Professional Visualization sectors are anticipated to recover, with Gaming benefiting from the integration of cutting-edge AI technologies and RTX improvements, while Professional Visualization is experiencing renewed enthusiasm for advanced AI-enhanced GPUs and digital twin solutions.
NVIDIA’s automotive division, showing steady expansion, is also forecasted to maintain its positive trajectory, supported by investments in autonomous driving and AI cockpit technologies increasingly vital for the automotive sector.
These elements, along with the rollout of Ethernet advancements, will be crucial in determining NVIDIA’s earnings outlook.
Nvidia stock price projections
As Nvidia prepares for its earnings report, various analysts have revised their price targets, reflecting strong confidence in the company’s future performance.
HSBC analysts raised Nvidia’s price target from $135 to $145, maintaining a buy recommendation. They noted Nvidia’s sustained strength, propelled by consistent demand for AI GPUs, and highlighted that delays in product launches are unlikely to significantly harm earnings.
Similarly, Goldman Sachs (NYSE: GS) analysts reiterated a buy rating for Nvidia with a $135 price target, emphasizing the company’s robust competitive position and strong demand.
Likewise, analysts from Citi (NYSE: C) preserved their Buy rating, anticipating that Nvidia’s comments regarding Blackwell processors will reassure investors about the company’s promising outlook for 2025, establishing a price objective of $150.
Market impact and forecasts
Wall Street analysts largely agree that Nvidia remains a solid buy, with an average price target of $144.17, suggesting a potential increase of 16.51% from its current value.
The highest price estimate is set at $200, while the lowest is $100. This consensus indicates heightened expectations for Nvidia’s forthcoming earnings report, which Wedbush Securities analyst Dan Ives described as a pivotal moment for the market, driven by increasing demand for AI.
As Nvidia’s second-quarter earnings announcement approaches, investors will carefully watch how the company manages potential product delays and utilizes its strengths in AI and GPU demand to sustain its growth trajectory.
With analysts maintaining an optimistic outlook, Nvidia’s stock may experience considerable movement following the earnings announcement.
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