On Tuesday, KeyBanc maintained its Overweight rating on NVIDIA (NASDAQ:NVDA) stock with a steady price target of $180.00, despite anticipating mixed results in the near term.
The firm predicts that NVIDIA will report strong third-quarter results that exceed expectations, bolstered by robust demand for its Hopper products. They also expect the company to provide guidance for the fourth quarter that is slightly above consensus estimates.
However, the analyst from KeyBanc also noted potential near-term headwinds for NVIDIA. These include delays in the rollout of H20 in China due to a preference for domestic AI solutions, a loss of market share to AMD (NASDAQ:AMD)'s MI308, and the increased availability of Blackwell (B200).
Additionally, NVIDIA's recent decision to switch from MPWR to IFX as its primary PMIC vendor may lead to supply constraints and affect the availability of GB200 NVL server racks in the fourth quarter.
In light of these factors, KeyBanc has adjusted its fourth-quarter estimates for NVIDIA, reflecting the anticipated pushouts and supply constraints. However, the firm remains optimistic about NVIDIA's long-term prospects.
The analyst has fine-tuned the fiscal year 2026 revenue and EPS estimates to $218 billion and $5.04, respectively, which are still well above the consensus of $186 billion and $4.24.
KeyBanc's outlook for NVIDIA is based on the belief that any short-term pressure on NVIDIA's stock will be outweighed by the long-term benefits. The firm sees a favorable risk/reward scenario for NVIDIA, driven by the company's potential for outsized growth in generational AI technology.
In other recent news, NVIDIA Corporation (NASDAQ:NVDA) has introduced a blueprint for real-time computer-aided engineering (CAE (NYSE:CAE)) digital twins, with Ansys (NASDAQ:ANSS) being the first company to adopt it. This new blueprint is expected to significantly reduce development costs and energy usage.
Furthermore, NVIDIA has collaborated with SoftBank (TYO:9984) Corp to launch the world's first combined artificial intelligence and 5G telecommunications network, known as an artificial intelligence radio access network (AI-RAN).
In terms of financials, analysts project NVIDIA's FQ3 and FQ4 sales to reach $33.2 billion and $37 billion, respectively. HSBC anticipates NVIDIA's third-quarter sales to surpass both management's guidance and consensus estimates, reaching $35.3 billion. The firm's sales forecasts for the fourth quarter of fiscal year 2025 and the first quarter of fiscal year 2026 are $38.0 billion and $42.7 billion, respectively.
Analyst firms including Bank of America, Rosenblatt Securities, Morgan Stanley (NYSE:MS), and Evercore ISI have maintained positive stances on NVIDIA. Bank of America reiterated a positive outlook on NVIDIA's shares despite concerns about the high power consumption of the company's next-generation Blackwell platform.
Rosenblatt Securities maintains a Buy rating on NVIDIA, with a price target of $200, expecting a positive earnings report. These are some of the recent developments surrounding NVIDIA.
InvestingPro Insights
NVIDIA's financial metrics and market position align closely with KeyBanc's optimistic long-term outlook. According to InvestingPro data, NVIDIA boasts an impressive revenue growth of 194.69% over the last twelve months, with a staggering 122.4% quarterly growth in Q2 2025. This robust growth supports KeyBanc's prediction of strong third-quarter results.
The company's financial health is further underscored by its gross profit margin of 75.98% and operating income margin of 61.87%, reflecting NVIDIA's ability to maintain profitability amid rapid expansion. These figures reinforce the analyst's confidence in NVIDIA's long-term prospects, despite potential near-term challenges.
InvestingPro Tips highlight NVIDIA's strong market position, noting it as a "Prominent player in the Semiconductors & Semiconductor Equipment industry." This aligns with KeyBanc's view on NVIDIA's potential for outsized growth in AI technology. Additionally, the tip indicating "Analysts anticipate sales growth in the current year" corroborates KeyBanc's expectation of fourth-quarter guidance exceeding consensus estimates.
For investors seeking a more comprehensive analysis, InvestingPro offers 21 additional tips for NVIDIA, providing deeper insights into the company's financial health and market position.
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