Nvidia (NVDA) shares surged over 4% on Tuesday, buoyed by optimistic projections from Wall Street analysts in anticipation of the company’s forthcoming earnings report set for Wednesday after the bell. Analysts at Stifel and Truist Securities upped their price targets for Nvidia, reflecting confidence in the tech giant’s future. Stifel’s Ruben Roy increased his target to $180 from $165, while Truist’s William Stein set a new target of $167, up from $148.
Roy’s analysis was underpinned by a “diverse set of data points” highlighting Nvidia’s solid standing in the AI and data center markets. He pointed out the ongoing high investment in AI infrastructure by major cloud service providers, or hyperscalers, and the demand for Nvidia’s cutting-edge Blackwell AI chips. According to Roy, Nvidia is poised to capitalize on a market opportunity that could exceed $100 billion by the end of 2025, with an even broader potential market reaching into the trillions over the longer term.
Further supporting Nvidia’s stock rise was the announcement from cloud provider Nebius Group (NBIS), which is deploying its first GPU cluster utilizing up to 35,000 Nvidia chips. A GPU cluster is a grouping of graphics processing units that work together to handle high-performance computing tasks, like deep learning and AI model training, far more efficiently than standard CPU clusters.
However, this positive momentum comes in the wake of concerns about Nvidia’s Blackwell AI chips overheating when densely packed into servers, an issue that saw Nvidia’s stock drop by 1.3% the previous day. Despite this, market sentiment remains high, with analysts and investors eager to see how Nvidia addresses these technical hurdles in its earnings report scheduled for after the market closes on Wednesday.
The company is anticipated to announce adjusted earnings of 71 cents per share with revenues hitting $33.1 billion, according to a FactSet consensus of analyst estimates. The upcoming earnings will be a critical moment for Nvidia to reassure investors about the scalability of its Blackwell chips and its overall strategy in the booming AI market.
Price Action: At last check, Nvidia shares were up 4.70%, or $6.55, trading at $146.77, bringing their year-to-date gains to approximately 197%.
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