Nvidia Stock Skyrockets Ahead of Earnings Report

Nvidia, the renowned chipmaker, has experienced a staggering surge in its stock value throughout the year, doubling its worth. Despite this substantial growth, Wall Street analysts remain highly bullish on the company's prospects. Analysts such as Rick Schafer from Oppenheimer and Christopher Rolland from Susquehanna recently raised their price targets for Nvidia's stock, setting them at $350 and $310, respectively. Similarly, William Stein from Truist also increased his target to $322 last week.


The analysts' unwavering confidence stems from the continuous development of AI tools and the subsequent demand for Nvidia's AI-oriented GPUs. They firmly believe that these factors will enable Nvidia to surpass revenue and earnings estimates for the first fiscal quarter. Consequently, they anticipate Nvidia to revise its financial outlook, providing an additional catalyst for the stock's upward trajectory.

In premarket trading on Thursday, Nvidia's stock was valued at $304.65, representing a 1% increase. This year alone, the stock has soared by an impressive 106.50%, as investors eagerly embrace Nvidia amidst the ongoing AI frenzy.

However, this exceptional growth comes at a premium. Nvidia's current trading value stands at nearly 60 times its projected earnings for the next 12 months, surpassing its average price-to-earnings ratio of 39.3 times.

AI has emerged as a prominent force within the tech sector, with an increasing number of companies vying for dominance, particularly since the release of OpenAI's conversational bot ChatGPT. In response, Nvidia has positioned itself as a comprehensive solution provider, offering cutting-edge chips designed to facilitate AI training across various data formats, including text, images, and videos. This ambitious endeavor necessitates substantial computational power.

Stein, who has maintained a Buy rating on Nvidia's stock since mid-2020, highlights his ongoing communication with component suppliers within Nvidia's supply chain. Through these conversations, he has observed a notable uptick in demand for AI GPUs, reinforcing his positive outlook on the company. Schafer, from Oppenheimer, shares a similar sentiment, expressing high expectations for Nvidia's Data Center AI GPUs, which contribute 60% of the company's revenue.

According to FactSet, Wall Street consensus expects Nvidia to report earnings per share of 92 cents for the first fiscal quarter ending in April, with anticipated revenue of $6.53 billion.

Key Takeaways:

  • Nvidia's stock value has doubled this year.
  • Analysts exhibit a bullish outlook on Nvidia ahead of its upcoming earnings report.
  • Anticipated outperformance of revenue and earnings by Nvidia.
  • Expectations of a revised financial outlook by Nvidia.
  • The growth of AI technology plays a pivotal role in Nvidia's success.
  • Nvidia maintains its position as a leading provider of AI chip solutions.
  • While Nvidia's stock is not cheap, it is projected to sustain growth in the future.