Nvidia is still showing improving fundamentals that boost the chipmaker's long-term growth potential, and have Truist Securities optimistic on the stock ahead of its upcoming earnings. Analyst William Stein kept his buy rating and raised his 12-month price target. His new price target of $145, which is $5 higher than his previous target, suggests shares could gain 14.
7%. Stein's increase comes as traders brace for Nvidia's second-quarter report, which is slated for release Wednesday after the bell. "Ahead of NVDA's CQ2 (July), our regular dialog with component buyers & sellers reflected NVDA business trends continuing to improve.
This, combined with publicly available data about AI investments & adoption lead us to raise estimates modestly," Stein said in a Monday note. Stein added that although he's confident Nvidia's year-on-year revenue growth will slow from the last few quarters, there is still a "solid case for ongoing rapid growth" over the next few years given upcoming AI models and investments that should usher in a new wave of AI capabilities and investments in graphics processing units, or GPUs. He noted that Blackwell orders are improving and customers are still taking H200 or H100 in their place, proving "insatiable" demand for GPUs.
Looking ahead to Nvidia's financial report, analysts are expecting a fourth straight quarter of triple-digit growth , but at a reduced pace of 112% to $28.7 billion, according to LSEG. That's slightly higher than the company's guidance of $28 billion.
Nvidia has seen its revenue more than triple on an annual basis over the past three quarters, with most of that growth fueled by its booming data center business. Nvidia shares have gained a whopping 155.4% and led the broad-market index to new highs, given its dominance in the AI computing market.
The stock ended 2023 as the best-performer in the S & P 500 after advancing more than 239%..
