Technology company Nvidia (NASDAQ:NVDA) is slated to release its third quarter Fiscal 2022 results on November 16, after the market closes.
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Wall Street expects Nvidia to post adjusted earnings of $0.71 per share in Q3. The expected Q3 EPS is lower than the prior-year earnings of $1.17 per share. Meanwhile, revenue is pegged at $5.8 billion, representing a year-over-year decline of 18.3%.
Markedly, the company has a strong track record of reporting upbeat earnings. It has beaten the street estimates in all the preceding eight reported quarters.
The Bulls & The Bears
Interestingly, ahead of the Q3 earnings, the stock has risen almost 15% in the last week. Nvidia confirmed that it will start offering a new A800 graphics-processing chip to its Chinese customers while adhering to the new U.S. regulations. The move acted as a tailwind, taking the stock higher.
On the flip side, analysts expect the sales from the data-center segment to report a decline due to lower chip sales in China.
On Friday, analyst Harsh Kumar from Piper Sandler forecast that data-center segment Q3 sales will be in line with expectations. Looking ahead, he expects the company to guide to sequential growth in the mid-to-high-single digits for the upcoming fourth quarter.
Comparing NVDA to its peers, he stated, “We do believe that NVDA has the potential to do better than the market in the long run and better than its peers.” Kumar reiterated a Buy rating on the NVDA stock with a price target of $200 (22.5% upside potential).
Oppenheimer analyst Rick Schafer, however, lowered the price target on NVDA to $225 (37.8% upside potential) from $250 and maintained a Buy rating on the stock.
Based on enterprise spending weakening, gaming inventory woes, and US-China export restrictions, he expects “a soft setup” for the third and fourth quarters of FY2022.
Predicting the gaming correction to persist into 1H23, he added that management is working with its channel partners to address the excess inventory issues.
Is Nvidia Corp. a Buy?
As per TipRanks, analysts are cautiously optimistic about the Nvidia stock and have a Moderate Buy consensus rating, which is based on 23 Buys and eight Holds. Nvidia’s average price forecast of $193.97 implies 18.8% upside potential.
Concluding Thoughts
The short-term sales numbers may be impacted by temporary factors like falling demand for PCs and export restrictions on chip sales to China. However, the street believes the stock’s long-term growth potential remains intact.
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