On Thursday, Bernstein SocGen Group updated its outlook on NVIDIA (NASDAQ:NVDA) stock, increasing the price target to $175 from $155, while maintaining an Outperform rating.
This adjustment comes after NVIDIA reported robust third-quarter results, surpassing expectations with revenues of approximately $35.08 billion and earnings per share (EPS) of $0.81, compared to the street's projections of around $33.25 billion and $0.74 respectively.
The analyst highlighted NVIDIA's record Datacenter revenues of about $30.8 billion, which exceeded the street's estimates of nearly $29.1 billion.
This surge was attributed to the strong demand for NVIDIA's Hopper products, with H200 experiencing significant growth into the double-digit billions. Additionally, other segments, particularly Automotive, also performed better than anticipated.
NVIDIA's fourth-quarter guidance was slightly above the street's expectations, forecasting revenues of about $37.5 billion and EPS of roughly $0.83, against the street's predictions of $37.1 billion and $0.82.
The sequential growth is primarily driven by the ongoing demand for Hopper products and the ramp-up of Blackwell, NVIDIA's latest platform, which is now expected to surpass several billion dollars in outlook.
Despite the positive projections, the company anticipates a quarter-over-quarter decline in Gaming due to supply constraints, which are expected to improve into calendar year 2025.
The analyst noted that while some may focus on the modest guidance beat and potential concerns like lower networking attach rates and a slight decrease in gross margins at the start of the next year, the overall outlook remains strong.
NVIDIA's gross margins are forecasted to dip slightly as Blackwell ramps up, settling in the low 70 percent range. However, the trajectory is expected to return to the mid-70s as the platforms scale into fiscal year 26. The analyst expressed confidence in NVIDIA's strategy to meet the strong demand for its new platforms.
In conclusion, the analyst emphasized the continued high demand for Blackwell, suggesting that it will likely outpace supply for some time, indicating a potentially robust upcoming year for NVIDIA's datacenter segment.
The comprehensive capabilities of NVIDIA's offerings are seen to significantly widen its competitive advantage, with the company's overall narrative appearing to remain solid. Consequently, the price target has been raised, and the Outperform rating reaffirmed.
In other recent news, NVIDIA has been in the spotlight due to its impressive financial performance and strategic advancements in the AI industry. The company reported an all-time high total revenue of $35.1 billion, exceeding the expected $34 billion. The company's revenue outlook for the fourth quarter aligns with market forecasts at $37.5 billion.
However, a temporary dip in gross margins is anticipated due to the early ramp-up of their Blackwell product, but it is expected to recover later in the year.
Citi, Deutsche Bank (ETR:DBKGn), Morgan Stanley (NYSE:MS), and Evercore ISI have all updated their stances on NVIDIA. Citi maintained a Buy rating and increased the price target to $175, while Deutsche Bank kept a Hold rating and raised the target to $140.
Morgan Stanley maintained an Overweight rating and increased the price target to $168. Evercore ISI nudged its price target up to $190 and maintained an Outperform rating on the stock.
These recent developments underscore NVIDIA's strong financial performance and strategic position within the rapidly expanding AI industry.
The company has addressed investor concerns, particularly regarding the scaling of Large Language Models (LLMs), and reassured stakeholders about its production capabilities. NVIDIA's Blackwell production is in full swing, with January quarter shipments expected to surpass previous forecasts.
InvestingPro Insights
NVIDIA's impressive performance and positive outlook are further supported by real-time data from InvestingPro. The company's market capitalization stands at a staggering $3.57 trillion, reflecting its dominant position in the semiconductor industry. NVIDIA's revenue growth has been nothing short of extraordinary, with a 194.69% increase over the last twelve months as of Q2 2025, aligning with the analyst's observations of record-breaking datacenter revenues.
InvestingPro Tips highlight NVIDIA's financial strength and market position. The company boasts a perfect Piotroski Score of 9, indicating robust financial health. This score supports the analyst's confidence in NVIDIA's ability to meet strong demand for its new platforms. Additionally, NVIDIA has maintained dividend payments for 13 consecutive years, demonstrating consistent shareholder returns despite its high-growth profile.
The company's gross profit margin of 75.98% in the last twelve months aligns with the analyst's discussion of NVIDIA's projected gross margins. This impressive figure underscores NVIDIA's ability to maintain profitability while investing in cutting-edge technologies like the Blackwell platform.
For investors seeking a deeper understanding of NVIDIA's potential, InvestingPro offers 22 additional tips, providing a comprehensive analysis of the company's financial health and market position.
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