Stirring excitement on Wall Street, Nvidia (NASDAQ:NVDA) is finally set to unveil its quarterly report. Following today’s market close, the chip giant will deliver its F4Q24 report for the January quarter.
Given how central Nvidia has been to the rise of AI over the past year, the print is seen as something of a litmus test for the developing AI story. Last year, Nvidia made a habit of smashing Street expectations, but can the company deliver another blowout beat-and-raise display?
That’s definitely a possibility, says Stifel analyst Ruben Roy. “While recent industry data points have indicated that GPU availability has improved, we believe that lead times remain extended,” the 5-star analyst opined. “In our view, overall demand remains robust with hyperscalers, AI partners (OpenAI, Anthropic, Inflection), and longer-tail purchasers (large enterprise, cloud-GPU, AI-startups), all continuing to contribute to medium-term demand.”
As for what to look out for on the earnings call, Roy anticipates that the main questions asked will revolve around the “training phase versus inference phase relative to the GPU demand curve.” Regarding this matter, Roy expects substantial investment in LLM (large language model) training to persist throughout the year. Although it’s early to determine, the main concern in the long run will be whether “inference ramps” will sufficiently compensate for the inevitable decline in the deployment of training clusters. More color on this issue should be provided at the March GTC event.
As for the numbers, at the midpoint, Nvidia’s revenue guide calls for $20 billion at the top-line, representing a 231% year-over-year uptick and a 10% sequential improvement. Going by recent supply chain chat, which implies “improving supply coupled with continued strong demand,” Roy is expecting the revenue haul to surpass the high-end of the guide, i.e., to come in above $20.4 billion. As such, Roy has now raised his Q4 revenue estimate, at the same time maintaining his gross margin estimate and modestly increasing his operating expense forecast. That brings the analyst’s F4Q revenue and EPS estimates to $20.8 billion and $4.68, respectively, both above current consensus estimates of $20.4 billion and $4.59.
Summing up, Roy reiterates Nvidia’s position as the frontrunner to “benefit from AI-related infrastructure investment.” He rates NVDA shares a Buy, while raising his price target from $665 to $865. Investors stand to pocket ~25% gain should the analyst’s thesis play out. (To watch Roy’s track record, click here)
Roy’s stance is a popular one on Wall Street; 36 others join him in the bull camp, while an additional 3 Holds can’t detract from a Strong Buy consensus rating. The average price target currently stands at $761.37 and implies ~10% from current levels. (See Nvidia stock forecast)
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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.
