Nvidia’s Earnings Could Be Noisy, but These Bulls Are Still Upbeat on the Stock

Nvidia Corp. stands at the forefront of one of the most significant growth opportunities in the tech industry, according to Susquehanna analyst Chris Rolland. In a recent note to clients, Rolland emphasized that Nvidia’s stock is trading at a “reasonable multiple” and has substantial potential ahead, especially with the company’s robust positioning in the AI space.

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While Rolland maintains a positive outlook on Nvidia’s stock, acknowledging that the upcoming earnings report is likely to be strong, he also highlighted some potential near-term challenges. One area of concern is the speculation surrounding a possible delay in the shipment of Nvidia’s new Blackwell chip lineup. Although Nvidia has stated that it does not comment on rumors and that Blackwell production is still on schedule to ramp up in the second half of the year, Rolland noted that the CEO of Super Micro Computer Inc., a key Nvidia partner, appeared to confirm the delay during a recent earnings call.

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This potential delay in the Blackwell chip shipments is something that Rolland believes warrants further explanation from Nvidia. He suggested that if the company were to push back its delivery timeline by a few months, it could delay initial revenues from the Grace Blackwell rack-scale offering, referred to as GB200, into 2025.

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Nvidia is set to report its earnings next Wednesday afternoon, and Rolland expects another strong performance. However, he also pointed out that there are high expectations leading into this report, particularly regarding the Blackwell ramp-up, which could be crucial for driving further gains in the stock.

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Despite the concerns about a potential delay, there are several positive indicators for Nvidia. For instance, Super Micro’s commentary during its earnings call suggested that demand remains strong and is expected to continue. Even if the Blackwell shipments are delayed, Rolland noted that the improving supply and availability of Nvidia’s current Hopper graphics processing units (GPUs), specifically the H100 and H200, should help bridge the gap. He remains confident in Nvidia’s outlook, maintaining his $160 target price for the stock.

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Other analysts have echoed similar sentiments about Nvidia’s current and future product offerings. Stifel’s Ruben Roy, for example, has observed sustained strong interest in Nvidia’s Hopper chip lineup, despite the excitement around the upcoming Blackwell series. Roy’s discussions with industry insiders suggest that any potential delays in Blackwell shipments are likely to be measured in months rather than quarters, minimizing the impact on Nvidia’s overall performance.

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Roy expects Nvidia to deliver another beat-and-raise scenario for its July results and October guidance. He doesn’t anticipate any significant changes in the company’s messaging, which has consistently focused on its long-term strategy and continued investment in both organic growth and collaborative software offerings. Roy has a buy rating on Nvidia’s stock with a target price of $165.

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Oppenheimer’s Rick Schafer also provided his perspective on Nvidia’s earnings and outlook. He anticipates a “low-volume market introduction” for the Blackwell B100 product in the January quarter, followed by a more substantial ramp-up in the April quarter. Schafer emphasized Nvidia’s entrenched position in the data center AI ecosystem, which he views as central to the adoption of generative AI technologies.

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Schafer described Nvidia as “the purest scale play on AI proliferation” and praised the company’s efforts in advancing rack-scale systems. He highlighted that Nvidia’s move to rack-scale systems leverages its unique end-to-end software connectivity accelerator platform, further solidifying its leadership in the AI market. Schafer rates Nvidia’s stock at outperform with a $150 price target.

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On Tuesday morning, Nvidia’s shares fell by 0.9%, putting the stock at risk of ending its six-session win streak, which has been the longest such streak since late March. However, over the past six sessions, Nvidia’s stock has surged by 24.1%, reflecting the market’s optimism about the company’s future prospects.

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In summary, while there are some concerns about the potential delay in the Blackwell chip shipments, analysts remain largely optimistic about Nvidia’s long-term growth potential. The company’s strong position in the AI and data center markets, coupled with ongoing demand for its current product offerings, suggests that Nvidia is well-positioned to continue its upward trajectory, even in the face of short-term uncertainties.

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