Wall Street Analysts Urge Investors to Buy Nvidia Stock Following Post-Earnings Dip

Wall Street analysts say buy the post-earnings dip in Nvidia shares

Investors may want to consider using the post-earnings weakness in Nvidia to scoop up shares, according to some Wall Street analysts. Shares of Nvidia slumped about 3% in the premarket -- after falling by more than 8% at one point in after-hours trading -- even after the chipmaker topped Wall Street's quarterly estimates . Nvidia also said it plans to ship "several billion dollars" worth of Blackwell revenue in the fourth quarter, alleviating some recent concerns of production delays. The company, however, said gross margins declined from the previous quarter. Nvidia also issued a stronger-than-expected forecast, but it was below the so-called "whisper" number. Some Wall Street analysts attributed these disappointments to the decline. That wasn't enough to deter analysts from recommending buying the Nvidia dip. "We are buyers of NVDA on the pullback following the Q2 print," wrote Piper Sandler's Harsh Kumar. "In our opinion, fundamentals remain intact; however, the stock is off AH on concerns of [gross margin] compression paired with guidance not being large enough relative to prior beats." NVDA 1D mountain Shares fall after earnings report UBS analyst Timothy Arcuri also recommended buying the weakness, noting that key indicators for the company remain bullish. Those include growth in purchase and supply commitments. Bernstein's Stacy Rasgon, meanwhile, lifted his price target to $155 from $130, saying the "narrative remains solid." The new target reflects 23% upside from Wednesday's close. Many analysts also reiterated their confidence in the stock's long-term AI potential and the ramp of its Blackwell chips. Morgan Stanley's Joseph Moore boosted his price target to $150 from $144 a share, representing 19% upside from Wednesday's close. "We think that Blackwell will be an accelerant to growth next year, and we expect Nvidia to gain share slightly in processors, vs. custom [application-specific integrated circuits] or alternative merchant solutions," he said. Bank of America's Vivek Arya told investors to "ignore the quarterly noise," adding that the stock offers "unique growth at very reasonable valuation." NVDA YTD mountain Shares this year Elsewhere, JPMorgan's Harlan Sur lifted his target by 35% to $155 a share, citing strong AI demand and the impending Blackwell ramp. "Bottom line, the team continues to maintain a 1- 2 step lead ahead of competitors with its silicon/hardware/software platforms, and a strong ecosystem ... and the team is further distancing itself with its aggressive cadence of new product launches and more product segmentation over time," he wrote. Nvidia has been the market stalwart once again in 2024, as investor enthusiasm around AI and its impact on corporate profits hasn't relented. Year to date, the stock is up a whopping 153.6%.

Buy Nvidia pullback as key indicators are bullish: Wall Street By Investing.com

Wall Street analysts are encouraging investors to buy the latest pullback in Nvidia shares. The AI darling's quarterly forecast on Wednesday fell short of the lofty expectations set by investors, who have fueled a massive rally in its stock, betting heavily on the future of generative AI. The chipmaker's shares fell around 3% in Thursday's premarket trade, dragging down other chip stocks as well. Despite significant growth and profit, the results were seen as mixed. For the quarter ending July 28, NVIDIA Corporation (NASDAQ:NVDA) posted adjusted earnings of $0.68 per share on revenue of $30.04 billion, surpassing analyst expectations of $0.64 per share and $28.68 billion in revenue. The strong results were fueled by a 154% year-over-year increase in data center revenue, reaching $26.27 billion. Looking ahead to Q3, Nvidia said it expects revenue of $32.5 billion, plus or minus 2%, ahead of Wall Street's estimate of $31.9 billion, and sees itself generating "several billions in Blackwell revenue" in Q4. Nvidia has guided non-GAAP gross margins to 75.0%, in line with consensus expectations. For the full year, gross margins are expected to stay in the mid-70% range, with Q4 margins projected to be slightly lower than the approximately 75% achieved in FQ3. Although Nvidia's revenue and gross margin forecast didn't trounce Wall Street's targets as in previous quarters, analysts remained optimistic about the stock. More concretely, analysts at UBS believe investors should "buy the pullback," as key NVDA indicators are still bullish. UBS particularly highlighted the surge in Nvidia's purchase commitments and supply obligations, which they note is "the most important metric we watch and a harbinger of future growth." "In our view arguably the most bullish sign of the print was ~$10B increase in what we consider to be its total supply ($6.7B BS inventory + $27.8B purchase commitments)," analysts wrote. "This was up ~40% Q/Q after growth in this number had slowed considerably the past few Qs and was up only 15% last Q after having been flat in FQ4." The bank's analysts also said they are not concerned about gross margin and expect data center margins to remain fairly consistent throughout the Blackwell cycle, similar to the margins observed during the Hopper cycle. Similarly, analysts at Bank of America (NYSE:BAC) reiterated a Buy rating on Nvidia stock after the report and raised the target price on the stock from $150 to $165. BofA cautioned that the stock is "likely to be volatile" in the near term due to some of Nvidia's projections missing elevated expectations, and flagged that rising Blackwell ramp costs could weigh on Q3 margins. However, despite the noise, analysts stressed they "continue to believe in NVDA's unique growth opportunity, execution and dominant 80%+ share as generative AI deployments are still in their first 1-1.5yr of what is at least a 3-4 year upfront investment cycle." "AI deployment remains a mission-critical imperative for global cloud/enterprise customers, with NVDA providing the best turnkey model," they added. The bank also highlighted Nvidia's compelling valuation, with a price-to-earnings (PE) ratio of 30-35 times estimated CY25 earnings, or a PEG ratio of less than 1 relative to the expected EPS growth of over 40%. This represents "a standout in not just semis but also in large-cap tech/growth," BofA's team emphasized.

Nvidia stock dips after earnings, is a major bounce on the horizon?

Nvidia shares dipped 6% after earnings on Wednesday despite beating Wall Street estimates of $28.7 billion and 64 cents earnings per share, to record $30.04 billion and 68 cents earnings per share. Despite the uptick in earnings, it failed to meet the lofty expectations of investors who are accustomed to steeper revenue increases as had been seen in previous quarters as year-on-year comparisons showed decelerating revenue growth. This deceleration, combined with uncertainties surrounding the long-term trajectory of the generative AI boom, cast a shadow of doubt on the sustainability of Nvidia's remarkable growth story. The slight delay in the launch of Nvidia's highly anticipated Blackwell chips also raises concerns about potential production challenges and their impact on future revenue streams. While the company remains confident in its ability to ramp up production and meet demand, any further setbacks could further dampen investor sentiment and lead to shorting. The competitive landscape also demands some attention, with rivals like AMD making strategic moves to expand their presence in the AI chip market, not to mention new market entrants D-Matrix who are looking to replace the GPU-based chip with a "first-of-its-kind", cheaper alternative. Although Nvidia currently enjoys a dominant position, the increasing competition could potentially erode its market share and put pressure on its profit margins in the long run. Despite growth concerns and a more competitive environment on the horizon, Nvidia remains head and shoulders above rivals in the chip market and an AI forerunner, with strong revenues every quarter. Nvidia's future prospects remain promising as well suggesting that a significant stock bounce could be in the offing. The company's data center business, the primary engine of its success, continues to experience robust growth, driven by the increasing adoption of AI across diverse sectors. The company also anticipates strong demand for its upcoming Blackwell chip, which is expected to generate substantial revenue in the forthcoming quarters. The company's strategic initiatives, including a substantial share buyback program and a focus on optimizing production yields, underscore its unwavering confidence in its long-term growth trajectory. The ongoing investments in AI infrastructure by major tech companies further reinforce the sustained demand for Nvidia's powerful GPUs. The company's CEO remains optimistic about the future, emphasizing the diverse applications of its chips beyond just AI chatbots and highlighting the potential for widespread adoption of GPUs in data centers, powering everything from ad targeting and search engines to robotics and recommendation algorithms. Nvidia's commitment to innovation is another key factor bolstering its future prospects. The company has pledged to release a new AI chip architecture annually, a significant acceleration from its historical two-year cadence. This rapid innovation cycle, coupled with the introduction of new software designed to further entrench its chips in AI software, positions Nvidia to maintain its technological leadership and stay ahead of the competition. This shift to a one-year release cadence presents a potential challenge for rivals like AMD and Intel, who currently operate on a two-year cycle. While competitors like AMD have made strides in performance, Nvidia's accelerated release schedule and comprehensive software ecosystem provide a significant advantage. At the time of writing, the stock is hovering at $125.56, and has recently been trading within a consolidating range. After opening lower, traders will be looking for signs of a bounce back as the daily chart retains a bullish picture with prices still well above the 100-day moving average. RSI edging down softly at around 60 suggests that upward momentum is slowing down possibly due to profit taking. Buyers could find resistance at the $126 price level, with a decisive breakout likely to pause at the $130 mark. On the downside, a further slide could be held at the $120 mark, with a breach below that area likely finding support around $116.31. The information contained within this article is for educational purposes only and is not intended as financial or investment advice. It is considered accurate and correct at the date of publication. Changes in circumstances after the time of publication may impact the accuracy of the information. The performance figures quoted refer to the past, and past performance is not a guarantee of future performance or a reliable guide to future performance.

Nvidia Rebounds In Premarket After Thursday's 6%+ Drop: What's Going On? - NVIDIA (NASDAQ:NVDA)

Nvidia Corp. NVDA shares, which pulled back sharply on Thursday following the artificial intelligence stalwart's quarterly results, are finding their feet. In premarket trading on Friday, the stock rebounded by nearly 1.5%. The stock woes stemmed from unrealistic expectations of the Street, and with the company's guidance showing the smallest increment relative to the consensus in several quarters, traders promptly trimmed their positions. A lack of clarity on the Blackwell 200 delay also hurt sentiment to some extent. Investors' fears may be unfounded, going by sell-side reactions to the earnings report. Not a single analyst tracked by Benzinga Pro downgraded the stock or lowered their price targets, with a few only nudging it higher. Most recommended buying the stock on its dip. See Also: How To Buy Nvidia (NVDA) Stock Fund manager Louis Navellier said he is not deterred by near-term weakness as he does not see any effective competitor emerging to disrupt the generative AI monopoly that Nvidia enjoys. "As a result, I am planning on holding Nvidia for several more years and I hope you are enjoying the ride in this great company that is truly a "once-in-a-lifetime stock" that can transform both your portfolio and lifestyle," he said. The average analysts' one-year price target for Nvidia is $151.49, according to data compiled by TipRanks, and with the consensus price target, there could be over 28% upside potential. After declining 6.38% in Thursday's session, Nvidia rose 1.50% to $119.35 in premarket trading, according to Benzinga Pro data. Notwithstanding the near-term weakness, Nvidia is up about 144% for the year-to-date period. If Friday's inflation data is benign, there is a good chance that Nvidia will make good its recent losses. Read Next: Nvidia Analysts Say Pullback Is Buying Opportunity: 'Pushing AI Envelope Too Significant To Slow Down' Photo courtesy: Shutterstock Market News and Data brought to you by Benzinga APIs