As Nvidia (NASDAQ: NVDA) approaches its highly anticipated second-quarter earnings release on August 28, 2024, the tech giant continues to capture the intense focus of investors.
Despite recent market volatility, Nvidia’s stock has demonstrated remarkable resilience this year, posting a year-to-date gain of 151%. However, the stock experienced a decline of over 3% on August 22, bringing its price down to $125.78.
This decline added to a week of fluctuating performance, yet Nvidia still managed a 0.78% gain on its monthly chart, according to the latest data from Finbold on August 23.
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Despite this short-term volatility, several factors have supported Nvidia’s stock as the company heads into its earnings announcement.
Factors shaping upcoming results
One of the major concerns impacting Nvidia’s performance is the potential delay in launching the new Blackwell processors, which are expected to be faster, cheaper, and more efficient than previous models.
Reports of design flaws causing this delay have introduced short-term volatility, impacting Nvidia’s fundamentals.
Nevertheless, the excitement surrounding this upcoming product line has already driven a 20% recovery in Nvidia’s stock price after the initial hit from global market turmoil related to the yen-carry trade.
NVIDIA’s upcoming earnings report is expected to underscore the ongoing strength of its Data Center business, driven by record growth in first-quarter revenue and the increasing adoption of cloud-based solutions, particularly in AI computing and infrastructure.
The demand for NVIDIA’s GPUs, especially from major cloud service providers, along with advancements like the NVIDIA Quantum and Spectrum X800 Ethernet switches optimized for AI, is anticipated to be a significant revenue driver.
Additionally, the Gaming and Professional Visualization segments are likely to demonstrate recovery, with Gaming benefiting from new AI technologies and RTX integrations, while Professional Visualization sees renewed interest in advanced AI-enhanced GPUs and digital twin tools.
NVIDIA’s automotive segment, which is showing consistent improvement, is also projected to continue its positive trend, supported by investments in self-driving and AI cockpit solutions that are increasingly vital to the automotive industry.
These factors, including the introduction of Ethernet innovations, will be crucial in shaping NVIDIA’s earnings outlook
Nvidia stock price target
In anticipation of Nvidia’s earnings report, several analysts have revised their price targets, expressing strong confidence in the company’s future performance.
HSBC analysts raised Nvidia’s price target from $135 to $145, maintaining a buy rating. They highlighted the continued strength of Nvidia, driven by underlying AI GPU demand, and noted that potential delays in product launches are unlikely to significantly impact earnings.
Similarly, Goldman Sachs (NYSE: GS) analysts reiterated a buy rating on Nvidia with a $135 price target, emphasizing the company’s robust competitive position and strong demand.
Similarly, Citi’s (NYSE: C) analysts also maintained their Buy rating, projecting that Nvidia’s comments on Blackwell processors will reassure investors about the company’s strong outlook for 2025, setting a price target of $150.
Market impact and expectations
Wall Street analysts broadly agree that Nvidia remains a strong buy, with an average price target of $144.17, suggesting a potential 16.51% increase from its current price.
The highest price target is set at $200, while the lowest is $100. This consensus reflects high expectations for Nvidia’s upcoming earnings report, which Wedbush Securities analyst Dan Ives has described as a pivotal moment for the market, driven by surging AI demand.
As Nvidia’s second-quarter earnings release approaches, investor attention will focus on how the company addresses potential product delays and leverages its strengths in AI and GPU demand to sustain its growth trajectory.
With analysts maintaining a bullish outlook, Nvidia’s stock could see significant movement following the earnings announcement.
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