Nvidia’s second-quarter earnings next week are highly anticipated, as Wedbush analyst Matt Bryson believes the chip maker will report impressive results once again. However, Bryson points out that the extent of outperformance may not be the most significant factor.
According to Bryson, Nvidia’s strong presence in the field of artificial intelligence (AI) makes it a dominant force. As a result, the company’s results and forecasts do not necessarily have to meet the high end of Wall Street’s expectations to satisfy investors. Even if the forecasts for the current quarter fall short of expectations, the market is likely to focus on the potential strength in the upcoming quarters.
Bryson explains, “With the substantial increase in demand for AI training in the past quarter and no other silicon supplier capable of matching Nvidia’s output, any unfilled demand will simply be shifted to future quarters, boosting future sales and EPS.”
Wedbush remains “extremely bullish” about Nvidia’s future in the intermediate term. Bryson maintains an Outperform rating on the stock with a target price of $490, implying a 13% gain from Thursday’s closing level.
Furthermore, Nvidia has received numerous price target increases from Wall Street recently due to attention surrounding its earnings. The near-term demand for its chips in the data-center business, along with increased orders from Chinese companies concerned about tighter restrictions, are contributing factors.
Piper Sandler analyst Harsh Kumar also highlighted these factors when he raised his price target to $500 from $450 earlier this week.
Additionally, Bryson and Kumar are not even at the most optimistic end of Wall Street’s scale. According to FactSet data, the average price target for Nvidia is $529.60.
As of Thursday’s close, Nvidia’s stock had surged 197% in 2023, but it experienced a 3.7% dip to $417.40 in early trading on Friday.