Wall Street hopes Nvidia can keep carrying the AI trade with another ‘rock solid’ earnings report

JPMorgan analysts are anticipating Nvidia to beat on earnings and lift guidance for the current quarter. The bank said it expects revenue to come in at around $94 billion to $95 billion, a 15% increase compared to the first quarter.

Analysts said Nvidia’s stock was unlikely to see a strong trading day, pointing to historical drops following its past earnings reports. As opposed to financials, analysts said shares would be more likely to move based on these topics that could come up the investor call:

• Nvidia’s position relative to its competitors
• Details around Nvidia’s infrastructure funding agreements
• The outlook for Nvidia’s business in China
• The impact of HBM spec downgrades for Nvidia’s Rubin and Rubin Ultra platforms

“From a valuation standpoint, the stock has de-rated to well below usual/historical levels and is now trading at quite undemanding multiples,” analysts wrote in a note. “At the same time, though, continued escalation of EPS expectations has provided support for the stock to move higher – a pattern that we expect will persist as earnings continue to expand, driving the stock higher off its current level.”

The bank reiterated its “overweight” rating on the stock and $280 price target, implying 31% upside.

Goldman analysts said they expected Nvidia to “deliver solid results” for the second quarter and issue guidance “well-above” consensus estimates for the following three-month period, largely due to the boom in datacenters and expectations for Nvidia to begin its Rubin ramp in the third quarter.

The bank added that it expects earnings per share to come in at around 6% above consensus estimates for the second quarter, and 12% above estimates for the third quarter.

Analysts also listed several talking points likely to move Nvidia stock, with details on the company’s $500 billion customer financing platform and the Rubin ramp at the top of the list.

The focus among investors will also likely be centered on issues like AI monetization and the return on investment among hyperscalers, and whether Nvidia can maintain its gross margins, it added.

The bank reiterated its “buy” rating and $285 price target, implying 33% upside.

Bank of America remained bullish on Nvidia’s overall trajectory and valuation, but flagged key risks related to the company’s “All-in-AI” strategy, as evidenced by the chipmaker’s recent $105 billion deal with OpenAI. The main risk scenario is if AI demand slows, leading the firm’s growth rate and balance sheet to come under pressure.

“Top sector pick on compelling valuation of ~16x fwd PE (CY27) or 0.3x PEG, the lowest in ~10 years despite improving demand and, in our view, overblown memory and circular financing concerns,” Vivek Arya, an analyst, wrote in a client note this week.

Read more Sam Altman says the economy is adapting to AI slower than he expected

BofA pointed to five things investors should focus on heading into the earnings call:

1. The launch and supply of Vera Rubin, and if there are changes to Nvidia’s forecast that it can generate more than $1 trillion in revenue from 2025 to 2027
2. Clarity on vendor financing and backstops in Nvidia’s deal with OpenAI, and when cash can shift to buybacks
3. Whether Nvidia can maintain gross margins despite memory cost inflation
4. How fast demand is growing among hyperscalers and the accelerated-computing infrastructure and enterprise-related firms Nvidia works with
5. If open-source AI models become more popular relative to closed models, and the implications that could have on Nvidia’s addressable market.

The bank reiterated its “buy” rating and its $350 price target for the stock, implying 64% upside from current levels.

Jefferies predicts that Nvidia will beat on earnings and raise estimates for this quarter, given the firm’s “rock-solid” data points. Nvidia is likely to post $95 billion in revenue for the second quarter and $108 billion in revenue for the third quarter, a team of analysts led by Blayne Curtis said.

Rubin is also likely to see strong growth, with the ramp accounting for more than 40% of Nvidia’s total revenue by the end of the fiscal year.

“Positioning looks favorable given low valuation and new product cycle,” the analysts wrote said.

Jefferies pointed to lingering questions about energy costs amid the data center buildout, with demand for AI chips growing at a faster pace than the energy grid expected to support the required power.

“We remain bullish on AI over the long-term, but will be interested in hear commentary from management on any potential plans to address what seem to be a collection of headwinds set to impact the pace of deployment,” the note said of the risks.

Jefferies issued a “buy” rating and a $300 price target for Nvidia, implying 40% upside for shares.

UBS said it expects Nvidia to post revenue of around $94 billion to $95 billion for the quarter, with revenue in the following quarter likely exceeding $110 billion.

“Blackwell is holding stable with Rubin units starting to layer in ahead of what should be a more substantial revenue step-up in FQ4,” a team of analysts led by Timothy Arcuri wrote. “We think the numbers are more important than the narrative, and coming out of this call, we expect investors to gain greater confidence in a path to $15+ EPS in C2027E and $20 in C2028E – numbers that should keep the stock grinding higher.”

Hyperscalers have raised capex estimates for the year, most of which is attributed to memory price inflation, the analysts noted.

“This is ultimately bullish for NVDA, and as a result, we may hear about another significant stair-step in backlog on this earnings call,” they added.

The bank reiterated its “buy” rating and $280 price target on the stock, implying 31 upside from current levels.

Read more Uber now lets parents live stream their teenager’s ride. Here’s how to use it.