In a sign of confidence, several Wall Street analysts had raised their price targets on Nvidia (NVDA) stock ahead of its Q3 print. Nvidia didn’t disappoint either.
Q3 in Brief
The tech giant delivered outstanding Q3 performance, with its top and bottom lines exceeding the Street’s consensus estimates by a wide margin. Further, it issued better-than-expected Q4 revenue guidance, which drove its stock 9.3% higher in the pre-market trading session on Thursday.
Nvidia delivered EPS of $1.17 on revenues of $7.10 billion. Analysts expected Nvidia to post earnings of $1.11 per share on revenues of $6.82 billion.
What’s in the Offing?
Looking ahead, Nvidia expects to post revenues of $7.4 billion (+/-2%) in Q4, higher than the consensus estimate of $6.86 billion.
Its Q4 guidance assumes continued strength in the Data Center and Gaming segments, and reflects sequential improvement in sales.
It’s worth noting that Nvidia’s top line has grown both on a year-over-year and sequential basis over the past several quarters. The overwhelming demand for its products continues to fuel growth and supports my bullish view.
Similarly bullish on Nvidia is Vijay Rakesh of Mizuho Securities. Citing strength in the Data Center, Gaming, and Professional Visualization segments, the 5-star analyst raised his estimates and price target on Nvidia stock, post Q3 earnings.
Remarkably, Nvidia stock has more than doubled this year, compared to a 25% increase in the Nasdaq composite index, and Rakesh’s new price target of $335 reflects a further upside of 14.5%.
While the rally in Nvidia stock has driven its valuation higher, Rakesh stated, “We believe improving PCs, AI deep learning and inferencing markets, gaming trends, automotive and data center position it for upside to estimates.”
Wall Street’s Take
Alongside Rakesh, the majority of analysts have a positive outlook on Nvidia stock. On TipRanks, Nvidia has received 20 Buys and 2 Holds.
Moreover, NVDA scores a Perfect 10 from TipRanks’ Smart Score rating system, implying it will likely outperform the market.
The average Nvidia price target of $308.16 implies 5.3% upside potential to current levels.
Disclosure: On the date of publication, Amit Singh had no position in any of the companies discussed in this article.
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