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NVIDIA earnings preview: Stock price forecast after May 2024 earnings

Published 05/21/2024, 10:33 AM
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With NVIDIA's highly anticipated earnings report set to be unveiled on Wednesday, May 22, investors and analysts are on high alert, recognizing the potential impact on the company's stock price and stocks in the semiconductor and AI industries.

As a leading player in the AI sector, NVIDIA's performance is closely watched, and the upcoming earnings announcement is expected to offer crucial industry insights.

NVIDIA Earnings Prediction

Analysts have been weighing in with their thoughts on the upcoming report. Evercore ISI said in a note Monday that they suggest buying NVDA into its earnings report. “There are positives and negatives impacting the set-up into the print, but we believe the positives outweigh the negatives,” the firm said. 

Stifel: “Once again, a beat/raise is widely anticipated with investor focus likely to remain on medium-term sustainability of accelerating AI infrastructure investment, competitive dynamics as MI300x ramps and CSPs increasingly invest in home-grown AI accelerator technology, the usual concerns around China and updates on NVDA's software strategy. 

“We are not expecting any meaningful change in tone or messaging relative to what we heard at GTC in mid-March. Our supply chain checks continue to indicate a robust demand environment for H100/H200 even as excitement around Blackwell continues to grow.”

Morgan Stanley: “We continue to expect a strong beat-and-raise quarter from NVIDIA as Hopper demand remains robust before the Blackwell transition.”

Barclays: “All in, checks continue to point to >$1B in upside in April and $2B in July. We see DC ahead in April and now believe the segment ultimately comes in closer to $23B (with ~$3.5B coming from MLNX) vs. St. of $21.1B.”

Oppenheimer: “We, along with most, see a beat/raise led by insatiable CSP AI accelerator appetite. Flagship H100 GPU supply constraints continue to ease. We believe lead times now <20 weeks (vs. peak ~50 weeks last year), allowing mgmt. to better capture demand.”

Bank of America said it expects a beat and raise but expects a near-term deceleration ahead of the Blackwell transition. “We expect strength vs. consensus estimates, but for the stock to be volatile near-term due to 3 factors: 1) Quarterly deceleration ahead of Blackwell: Jul Q outlook could mark first quarter with <10% QoQ sales growth, 2) Greater China dependence for 2H: start of H20 shipments helps 2H growth pre Blackwell, but also raises China restriction risks, 3) Limited update to “40% inference mix” metric – recall this is what helped the stock on last call (metric was for CY23/FY24, updated metric might not be given until next year),” they wrote.

What Does NVIDIA Do?

NVIDIA is a leader in chip technology, especially Graphics Processing Units (GPUs) for powering demanding visuals in gaming, professional design, and AI applications. They also cater to the growing needs of the automotive industry with specialized chips for autonomous vehicles and advanced driver assistance systems.

Nvidia (NASDAQ:NVDA) is renowned for its pivotal role in the burgeoning artificial intelligence (AI) sector and has been a focal point of market speculation. 

NVIDIA Price Today

Nvidia shares dipped just over 1% Tuesday, following a report by the Financial Times that Amazon.com (NASDAQ:AMZN)'s cloud services division has paused orders of Nvidia's most advanced "superchip" to wait for a more powerful new model.

Nvidia shares are trading around the $938.31 mark after closing Monday’s session at $947.80.

NVIDIA Stock Forecast

Assessing the company’s potential stock price move, most analysts are unsurprisingly bullish on Nvidia shares. Evercore ISI maintained an Outperform rating and a $1,160 price target on the stock. 

Stifel kept a Buy rating on Nvidia, increasing estimates which, in turn, resulted in the firm raising its target for the stock to $1,085, up from $910. This is based ont he firm using the same 35x multiple on its new C2025 EPS estimate of $31.45. NVDA also remains a top pick at Stifel.

Elsewhere, Morgan Stanley and Barclays kept Overweight ratings on Nvidia. Morgan Stanley maintained a $1,000 target for the stock, while Barclays lifted its target to $1100 from $850.

Oppenheimer said it sees NVDA as best positioned in AI, benefiting from full stack AI hardware/software solutions. They reiterated an Outperform and $1,100 target on the company’s shares.

BofA also maintained a Buy rating on Nvidia, keeping it as a top pick ahead of the earnings release. It sees the company’s share price rising to $1,100.

 

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