Nvidia Stock Set to Soar: Analysts Expect Big Earnings Ahead!

As the Q3 earnings season comes to a close, all eyes are on Nvidia (NASDAQ: NVDA), the chip powerhouse known for its revolutionary contributions to the tech world. Scheduled to unveil its earnings report for the October quarter (FQ3) this Wednesday, November 20, investors and analysts alike are eager to see if Nvidia can maintain its remarkable growth trajectory.

Rick Schafer, a highly regarded analyst with Oppenheimer and currently ranked 11th in Wall Street’s hierarchy, is optimistic. He forecasts robust results and an encouraging outlook driven by sustained demand for AI accelerators from cloud service providers and enterprises. "We see upside to F3Q (October) results and F4Q (January) outlook led by sustained CSP/enterprise demand for AI accelerators," Schafer noted.

One of the key highlights of this upcoming earnings report will be the performance of Nvidia’s Data Center segment, which constitutes a staggering 87% of its revenues. Schafer anticipates a phenomenal year-over-year growth of 97% and a 9% sequential increase, largely fueled by the success of the H200. With the rollout of the Blackwell architecture expected to gather momentum in F4Q, Nvidia is poised to add billions to its revenue during this quarter, with a stronger performance forecasted for the following quarter.

Additionally, the Networking segment, which accounts for 14% of Data Center revenue, is projected to see a 9% increase quarter-over-quarter and a remarkable 60% year-over-year growth in F3Q. With Spectrum-X Ethernet (Switches, DPUs) now shipping in high volume, Nvidia is on track to generate multi-billion-dollar revenues in the coming year.

Looking ahead, discussions with investors reveal that the market expects Nvidia to supply about 5-6 million GPUs by 2025. Analysts anticipate that the CY25 product mix will heavily feature “drop-in” HGX modules and air-cooled NVL36 GB200 racks, options designed to optimize existing data center infrastructure while addressing challenges related to liquid cooling.

Gaming, once Nvidia’s dominant revenue driver, is also expected to show signs of life, with Schafer predicting a year-over-year growth of 6%, alongside a sequential increase of 6% as well.

With such promising prospects, Schafer has raised his earnings per share (EPS) estimates for CY24, CY25, and CY26 from $2.80, $3.77, and $4.51 respectively, to $2.85, $4.16, and $5.04.

Despite an extraordinary 183% increase in stock value year-to-date, significantly outpacing the SOX index’s modest 17%, Schafer maintains that Nvidia remains attractively priced. He remarked, "NVDA trades at 29x our CY26E compared to its 5-year average of 37x. With one of the best growth margins and operational margins in the industry, NVDA is a key player in the ongoing AI revolution. Sustained structural growth led by Data Center and AI integration keeps us bullish on this stock."

Schafer rates NVDA shares as “Outperform” (or “Buy”), increasing his price target from $150 to $175, suggesting potential for approximately 25% returns over the next 12 months.

Broadly, the sentiment on Wall Street aligns with Schafer's outlook, with NVDA boasting a consensus rating of “Strong Buy” based on 39 Buys versus just 3 Holds. With the stock currently priced at $164.29, the average price target indicates an expected growth of around 17% within the next year.

Investors are definitely keeping an eye on Nvidia as it positions itself at the cutting edge of technology and innovation. Don't miss out on this thrilling opportunity in the tech market—Nvidia could be on the brink of a major breakthrough!