The Journey to the Zenith
Nvidia (NVDA) is gearing up for the release of its fiscal Q1 2025 earnings, scheduled for this Wednesday. Last year, following its fiscal Q1 2024 earnings report, Nvidia skyrocketed to the coveted $1 trillion company status. The report was an absolute spectacle, with remarkable earnings and guidance that left the market in awe.
A Stock on Fire
Nvidia’s stock has been on a relentless upward trajectory since last year’s earnings report. Despite a few minor setbacks, it has maintained its position among the top 5 gainers in the S&P 500 index for 2024, boasting year-to-date gains of nearly 89%.
Anticipating Nvidia’s Fiscal Q1 Earnings
Market analysts are eyeing Nvidia to report revenues of $24.5 billion for the recently concluded quarter, reflecting an impressive 241% year-over-year growth. The company has consistently surpassed both its own guidance and analysts’ estimates in recent quarters thanks to the soaring demand for its AI chips.
Volatility and Expectations
Nvidia’s earnings tend to introduce volatility into its stock. As we approach the latest earnings release, Wall Street is buzzing about the prospects for the Jensen Huang-led company and whether it can break the $1,000 barrier post-earnings.
The Future Landscape
Nvidia’s revenue growth is projected to slow down as it transitions to its new Blackwell chip. However, analysts remain divided on the impact of this transition, with Morgan Stanley expressing confidence in Nvidia’s sales trajectory. The company’s revenue guidance, especially amidst a changing demand environment, will be closely monitored, with expectations of a single-digit sequential revenue growth in fiscal Q2.
The Price Point Conundrum
Analysts have been revising their target prices for Nvidia ahead of the earnings report. Despite cautious sentiments from some quarters, there is an overall bullish outlook, with target prices soaring as high as $1,350. The mean target price of $990.51 already hints at a potential upside of 7.1% from recent closings.
Quest for $1,000
With Nvidia’s mean target price hovering just below $1,000, industry observers are eager to see if the stock can surpass this milestone post-earnings. Trading at a P/E multiple of 36.6x, Nvidia’s growth potential remains enticing, especially in the expanding AI landscape.
The allure of Nvidia’s high-powered chips in an era of surging global AI spending is undeniable. While competition looms on the horizon, Nvidia’s current dominance positions it well to continue reaping the benefits of the ongoing “AI boom.”
