On Thursday, a Craig-Hallum analyst increased the price target for NVIDIA (NASDAQ:NVDA) shares to $165 from $125, while reiterating a Buy rating on the stock. The adjustment follows NVIDIA's recent earnings report, which surpassed consensus expectations.
Despite a post-earnings dip in after-hours trading, the analyst believes the market may be undervaluing the company's prospects, particularly with the upcoming shift from its Hopper product line to the new Blackwell generation.
NVIDIA's fourth-quarter sales are expected to be bolstered by the introduction of Blackwell, with the GB200 model showing robust demand. The analyst forecasts that Blackwell could contribute several billion dollars to fourth-quarter revenues.
While new generations typically lead to a decline in sales for older products, the analyst anticipates that the Hopper line may continue to see solid demand for some time, complementing the Blackwell ramp-up.
The financial model for NVIDIA has been updated to reflect higher sales projections for the fourth quarter, with estimates now at approximately $37 billion, up from the previous $33 billion.
This increase in anticipated sales has also led to upward revisions for fiscal years 2026 and 2027 earnings per share (EPS) estimates, providing the basis for the new $165 price target.
The analyst's commentary underscores the expectation that the transition from Hopper to Blackwell will be a key factor influencing sales in the fourth quarter of fiscal year 2025.
The market will gain more clarity on the Blackwell ramp-up over the next two to three quarters. According to the analyst, the strong demand for NVIDIA's new generation is primarily constrained by supply availability.
In summary, Craig-Hallum maintains a positive outlook on NVIDIA, citing the potential sales growth from the Blackwell generation as a significant driver for the company's financial performance, leading to the raised price target and sustained Buy rating.
In other recent news, NVIDIA Corporation (NASDAQ:NVDA) has been the focus of several analyst firms following its strong financial performance. The tech giant reported record revenue of $30 billion, largely driven by demand for its Hopper and GPU computing platforms. The company is projecting a third-quarter revenue of $32.5 billion, fueled by anticipated growth in its Hopper architecture and Blackwell products.
Truist Securities raised NVIDIA's target to $148, maintaining a Buy rating, while Rosenblatt Securities upheld a Buy rating with a $200 target. Baird increased its target to $150, highlighting NVIDIA's potential for revenue growth, and Needham raised its price target to $145 in light of NVIDIA's robust financial results.
Despite concerns over NVIDIA's gross margin outlook due to the transition to the "Blackwell" GPU, Summit Insights maintained its Buy rating. The firm projects a resolution of these challenges by early 2025. These are among the recent developments at NVIDIA Corporation.
InvestingPro Insights
Following the recent earnings report and the optimistic outlook on NVIDIA's (NASDAQ:NVDA) transition to the Blackwell generation, InvestingPro data highlights several key metrics that may interest investors. NVIDIA boasts a substantial market capitalization of $3090.0 billion, reflecting its significant presence in the industry. The company's revenue growth over the last twelve months leading up to the first quarter of 2025 is an impressive 208.27%, indicating strong business expansion. Furthermore, with a gross profit margin of 75.29%, NVIDIA demonstrates its ability to maintain profitability.
InvestingPro Tips provide additional insights, noting that NVIDIA has a perfect Piotroski Score of 9, suggesting a healthy financial state. Analysts also anticipate sales growth in the current year, which aligns with the company's recent performance and the market's expectations for the Blackwell generation. For investors looking to delve deeper into NVIDIA's financial health and market potential, there are over 19 additional InvestingPro Tips available, including analysis on valuation multiples and stock price movements. These tips, along with real-time data, can be found on InvestingPro's dedicated NVIDIA page at https://www.investing.com/pro/NVDA.
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