Nvidia (NASDAQ: NVDA) is expected to report its calendar Q4 earnings next week. Ahead of its earnings, Wall Street analysts are optimistic about the stock and expect that the chip giant could be insulated from the broader economic upheaval by higher spending on artificial intelligence (AI). ‘
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The analysts’ optimism stems from the fact that Nvidia is already building workstations that can support the metaverse and AI apps. The AI race between big tech giants including Microsoft (MSFT) and Alphabet (GOOGL) is likely to heat up further which could in turn help Nvidia.
Top-rated Oppenheimer analyst Rick Schafer anticipates that spending on AI is likely to be “sacrosanct” even as the broader economy slows down. Schafer reiterated a Buy rating on the stock and raised the price target to $250 from $225. The analyst’s price target implies an upside potential of 13.6% at current levels.
Schafer has projected Nvidia’s data center revenues to grow 9% year-over-year in its first fiscal quarter. However, the analyst has projected the company’s gaming segment revenues to decline by 54% year-over-year in fiscal Q1 as spend slows on this segment versus during the pandemic.
Another top-rated KeyBanc analyst John Vinh is also bullish about the stock with a Buy rating and raised his price target to $280 from $220. The analyst’s price target implies an upside potential of 27.3% at current levels.
Vinh commented, “We see sustained outsized data center growth driven by increasing industry adoption of AI workloads, enhanced by generative AI workload.”
Overall, analysts remain cautiously optimistic about NVDA stock with a Moderate Buy consensus rating based on 17 Buys, four Holds and two Sells.
