It’s more than a month until Nvidia’s (NASDAQ:NVDA) fiscal Q1 2025 earnings report comes due (on May 22). Despite the distant date, however, TD Cowen’s 5-star analyst, Matthew Ramsay, felt confident enough to put out one of the earliest Q1 previews around.
So what’s the Tl;dr? According to Ramsay, who’s ranked in the top 1% of the Street’s stock pros, the good times are going to keep on rolling for Nvidia as we roll into Nvidia’s version of “fiscal 2025” (which everyone else calls calendar year 2024).
In a nutshell, Ramsay says Nvidia is quite simply his “top pick” in semiconductors, with an $1,100 price target and a “buy” rating – and AI, of course, is the reason. (To watch Ramsay’s track record, click here)
“Checks continue to indicate strong demand” for Nvidia’s market-dominating artificial intelligence chips, even as the company increases its ability to supply that demand through (calendar years) 2024 and into 2025. In the near term, the analyst says fiscal Q1 2025 should see Nvidia produce total revenue of $24.8 billion, of which a staggering $21.3 billion (86%) will come from the datacenter (which at this point means basically the AI chip) division. Assuming this is the right revenue number, it will equal 245% year-over-year growth, and 12% sequential, quarter-over-quarter growth.
Looking just a little bit further down the road, Ramsay further predicts that Nvidia will grow its revenues to $27.2 billion in Q2, with AI sales of $23.4 billion maintaining their proportion of the total – about 86%.
Now admittedly, that Q2 forecast does suggest a bit of a slowdown in Nvidia’s AI business (10% sequential growth, versus 12% growth in Q1). Not to worry, though. Dismissing concerns that Nvidia might need to pause to “digest” some of its growth this year, Ramsay argues that the technological advancement of Nvidia’s new “Blackwell” chips – four times faster than the current H100 line on large language model training functions, and as much as 30 times faster on inference functions (i.e. answering questions) – is such that Nvidia’s dominance in AI chips remains unchallenged.
The bigger question, then, isn’t so much whether Nvidia’s chips are good enough to sustain the momentum, but rather whether artificial intelligence itself is important enough to tech companies to continue fueling “insatiable demand” – and sky-high profit margins – for AI chips?
But again, Ramsay is unconcerned. “All signs continue to point up,” reassures the analyst. “We are [still] in the early innings” of this AI revolution, and Ramsay doesn’t see any risk of revenue growth even beginning to plateau before 2026 at the earliest. (By which time, by the way, Ramsay thinks Nvidia will be earning an astounding $31 per share or more). And this should mean that investors in Nvidia can expect to see “strong, sustained, above-peer growth across a widening set of verticals” for at least the next three years.
Assuming Ramsay’s right in his predictions, Nvidia investors shouldn’t be in any hurry to sell this long-term winner.
The rest of the Street has no doubts concerning Nvidia’s long term prospects, either. A Strong Buy consensus rating is backed by 39 Buys and just 2 Holds. The average price target stands at $1,004.92, and implies possible upside of ~32% over the next year. (See NVDA stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
