Wall Street overlooks modest Nvidia guidance, lift price targets ahead of strong Blackwell ramp
Investors shouldn’t let a smaller-than-expected guidance beat overshadow tailwinds from Nvidia’s looming Blackwell graphics processing unit rollout come January. Shares of the chip behemoth rose about 1.6% before the bell despite beating Wall Street’s top-and-bottom line estimates as it signaled a slowdown in revenue growth from prior quarters. Shares of the chipmaker are up 195% this year. Many industry analysts lifted their price targets on the AI chip darling, saying there are signs that the launch of its Blackwell chip has been strong and demand will likely outweigh supply well into 2025. NVDA YTD mountain Shares this year “This was never the quarter that NVDA was going to blow out numbers, and we are not overly concerned with any of the issues on this call as we see increasing beats as Blackwell ramps and still a path above $5 of EPS next year,” said Jefferies analyst Blayne Curtis. “The name will always struggle with elevated expectations, but business momentum should accelerate from here as Blackwell ramps and that has historically been the time to own the stock,” he added. Citi’s Atif Malik lifted the firm’s price target to $175 and opened a positive catalyst ahead of the consumer electronics show in January. He anticipates a raise in Blackwell sales expectations during the event and commentary from management regarding a “robotics industrial demand inflection.” Wells Fargo’s Aaron Rakers moved to a $185 price target, reflecting 27% upside from Wednesday’s close. He urged investors to take advantage of any pullback in the stock, citing confidence in Blackwell’s launch, which should top calls for “several billion” shipments next year and exceed supply for several quarters in 2026. Bernstein’s Stacy Rasgon boosted his target to $175, overlooking concerns of the smaller guidance beat and a decline in margins in Blackwell’s early days. He expects demand for the latest AI chips to outweigh supply, further supporting the company’s strong competitive advantage over its competition. Meanwhile, JPMorgan’s Harlan Sur lifted his price target to $170 a share, saying that margins should improve toward the mid-70s range in the second half of 2025 as Nvidia streamlines costs. “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. What’s next for the stock Despite strong Blackwell expectations, some analysts warn of potential near-term volatility. “Expect stock to churn near-term as investors digest lack of ‘sizzle’ but we continue to like the stock on its ‘substance,'” wrote Bank of America’s Vivek Arya. Barclays analyst Tom O’Malley referred to Nvidia’s modest outlook and commentary surrounding gross margins as the “perfect thread the needle guide,” while Loop Capital’s Ananda Baruah views the pullback as the “pause before the next leg up.” Cantor Fitzgerald’s C.J. Muse said the period heading into Nvidia’s GTC conference in March are “goldilocks months,” implying that investors have a lot of news to look forward to in the months ahead. “Blackwell constraints are likely to be a major factor for at least a year, but we continue to see a strong Blackwell cycle as a driver for the stock for several quarters,” said Morgan Stanley analyst Joseph Moore.
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