The Street is sticking with Nvidia (NVDA) into its market-moving earnings report next week.
Despite China-based DeepSeek rocking the super bullish AI thesis earlier this year, Wall Street still sees Nvidia profitting from the global buildout of AI infrastructure. During this earnings season, hyperscalers like Amazon (AMZN) and Meta (META) shared aggressive 2025 capital expenditures assumptions to emphasize the point.
"Over the coming decades the investment [in artificial intelligence] is happening," Russell Investments chief investment officer Kate El-Hillow tells me.
However, that's not to say there aren't signs of caution going into Nvidia's earnings report.
Yahoo Finance data shows Nvidia's first quarter earnings per share (EPS) trend has drifted modestly lower over the past 30 days. The Street has also not pushed up its 2025 EPS estimates on Nvidia for more than 60 days
Additionally, Nvidia currently ranks among the AI stocks with the lowest valuations. On a forward price-to-earnings (PE) multiple basis, Yahoo Finance data shows Nvidia trading at 32 times. Broadcom (AVGO) and Marvell Technology (MRVL) are valued at 35 times and 41 times, respectively. The Arm Holdings (ARM) number is 76 times. "I would say I wouldn't want to be Jensen [Nvidia CEO Jensen Huang] necessarily because, wow, other people are working on the same things," Microsoft (MSFT) co-founder Bill Gates told me on Yahoo Finance's Opening Bid podcast (listen in below).
The mood on the street a few days before Nvidia's earnings on February are as follows: 26.
Ryan Mellor, an analyst for HSBC Rating: Consistent Buy Target Price: $175, down from $185 earlier. "Most hyperscalers have actually revised up 2025 capex by 4%-26% during the earnings season, supporting our thesis that overall AI GPU demand outlook remains strong," despite recent concerns regarding the long-term demand impact of DeepSeek's lower cost approach. "However, on the back of lower NVL rack [Nvidia data center product] assumptions, we are lowering our FY26 estimate for data center revenue by 11% to $209 billion. However, our FY26 data center revenue forecast remains 14% above consensus of $184 billion." However, in order to determine whether there is room for additional upside, we believe that Nvidia is still under greater pressure to deliver stronger second half fiscal year momentum on the back of its B300/GB300 roadmap. John Vinh is a Keybanc Capital Markets analyst. Rating: Reiterated Overweight
Up from $180, the price target is $190. "While we do believe that manufacturing constraints are limiting shipments of GB200 NVL server racks, we believe this will be more than offset by the following: 1) given the lower initial manufacturing yields of GB200 NVL, we believe customers have been able to push out orders of GB200 and backfill with HGX-based B200 servers with x86 head nodes; 2) DeepSeek, as well as limited supply of Huawei's Ascend AI ASIC [custom chip], has created a surge in demand for H20 GPUs from China CSPs; 3) we believe Nvidia's customers, especially communications service providers, are financing its inventory at EMS providers, so effectively sell-in shipments from Nvidi to EMS are recognized as revenues. As such, we are raising estimates and our price target and believe Nvidia's strong results should alleviate any concerns that DeepSeek could derail near-term AI capex intensity."
Loop Capital analyst Ananda Baruah
Rating: Consistent Buy Reaffirmed: $175 as a price target "Big picture we believe that two to three year Street numbers remain low as our work with both customers and the Nvidia build ecosystem points [to] ... Nvidia GPU reaching 10 million to 12 million as hyperscalers look to increase their percentage on non-CPU compute to 50% plus in coming years (from ~10% currently)."
"Remember … for Nvidia the story is accelerated compute + Gen AI, which means it is facing two $1.0 trillion compute market opportunities ahead of it in coming years, each of which is just at the very start."
Bank of America analyst Vivek Arya
Rating: Consistent Buy Price Target: $190, reiterated
"We expect a modest beat in the fourth quarter, but Blackwell transition, Hopper declines, and China restrictions could hurt the outlook for the first quarter." "The stock could be volatile post results, but we expect positive momentum to resume as investors look forward to Nvidia's leading new product pipeline (GB300, Rubin) and total addressable market expansion into robotics and quantum technologies at upcoming GTC conference (March 17)."
Evercore ISI analyst Mark Lipacis
Reiterated to Outperform in Rating Reaffirmed: $190 as a price target "Nvidia remains the platform of choice for hyperscalers’ customers, the robustness of its software ecosystem and breadth of its development community put it 5 -10 years ahead of anything else in the market. AMD and Amazon AWS ecosystems are a distant #2 and #3."
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