Analyst’s New Nvidia Stock Target Revealed After Q2 Results | Nvidia Stock | NVDA Stock | NVDA

Nvidia uh of course big earnings this week not just important for NVIDIA V but important for the market for the index kind of Al a gauge of that Whisk on appetite let's go the reasons V you say Nvidia even after a big move it's still a buy one stronger Hopper cycle than expected explain that bullet to us so Josh Hopper is their current chip that is in production and what we're hearing from their customers is while some people expected to see air pocket in demand in between the past generation and the next generation orders for Hopper are actually stronger and several companies that reported said this publicly like Microsoft and snowflake they were actually not able to deliver or outperform on their numbers because they didn't have enough of these hoer chips to sell to their customers as a service so still strong demand for hober the second bullet point is going to be an interesting one in the report in the call Blackwell chip bright spot now here's why that's important because we've had these reports of the shipment delays for Blackwell so what do you see here that's right Joe so most Analyst at this point took out Blackwell numbers from earnings estimates from this year and we already know that there have been several deliveries of Blackwell to end customers so we're more optimistic than the market on Blackwell here specifically on the order delays or the system delays uh those relate just to Blackwell systems uh entirely composed of these Blackwell chips but the Blackwell chip itself is already in production and I think that's the big misunderstanding in the market right now and even if there were delays are you in the camp as a bull I'm guessing you are that if there were delays you would see a sale that's delayed but not ultimately destroyed that's right Josh so the key thing that we're really tracking here is end market demand so whether these a applications have uses whether hyperscalers will keep growing their cap spending those are really the most important things if there are delays they would likely be maybe a disappointment to the guide or push back to the guide so that would be usually a one quarter impact but the key for long-term investors is whether there is narket demand for nidia's product which we see right now as being ahead of its highly anticipated second quarter earnings later this week and a significant price Target raised from a top Wall Street analyst Nvidia shares nudged higher in early trade on Tuesday despite some delivery delays and supply chain constraints for its key ey powering ships and processors nvidia's shares have risen more than 133% from their early August lows over the past last month far outpacing gains for the broader NASDAQ Benchmark this increase has come despite concerns that AI demand will continue to accelerate well into the second half of the year and Beyond according to reports the company's recently introduced Blackwell line which is expected to generate up to $150 billion in data center sales for the company the following year has certain design problems that could cause it to be delayed in reaching important Nvidia Appliance until later in the year analysts had predicted that Blackwell would begin to boost nvidia's Topline growth in the third quarter and make their way into customer data centers throughout the globe by the last three months of the year at a Taiwanese event on Monday Barry lamb the CEO of Quant computer and a crucial Link in nvidia's server building supply chain stated that his business shipped AI servers equipped with vintage h100 and h200 Hopper chips throughout the second quarter and is expecting triple digit Revenue growth this year in a report released last week Key Bank Capital markets analyst John Vin stated that Blackwell shipments in the fiscal third quarter have been backfilled with higher Hopper bookings and that the delay would not affect the company's near-term forecast or second quarter earnings according to Wall Street estimates profits will likely total 64 cents per share up 137% from the previous year while revenues will more than double to 28.6 68 billion in May Nvidia informed investors that revenue for the current quarter would reach approximately $28 billion this higher than expected projection at the time allay investors fears regarding delays in receiving orders for h100 chips related to the Blackwell launch in a note released on Tuesday William Steen an analyst at truest Securities increased his price target for NVIDIA by $5 to $145 per share while maintaining his buy rating fundamental and emotive elements seem to be improving for the corporation he said prior to the tech Giants July quarter reporting Stang and his team stated our regular dialogue with component buyers and sellers reflected Invidia business Trends continuing to improve he went on to say that this along with publicly accessible statistics about AI Investments and adoption led us to slightly approv estimates moving his full year earnings Target from $33 and 39 per share to $361 per share if you want to keep up with nvidia's latest updates and keep up with the stock market latest news you can subscribe to our investing tutorial Channel as we post daily updates about the biggest changes and Catalyst in the market so click the Subscribe button if you don't want to miss the newest Market updates now back to today's video the week investors have been waiting for since the August markets sell off yes Nvidia will report earnings on Wednesday after the market closes the company is expected to address the Blackwell delay issue on the call joining us now to talk about Nvidia and how that can impact big Tech and overall Market sentiment is Gene mster Deepwater Asset Management managing partner Jean thank you for being here important big week um you think the odds are skewed that Nvidia actually trades down on earnings why is that well you uh hit the pressure point right out of the gate there and that is of course related to this Blackwell delay uh last quarter uh Jensen Wong said that they have they're going to have a lot of Blackwell demand a lot of Blackwell Revenue specifically in calendar 24 and I suspect that that's going to be modest Revenue we're talking about a three month delay and uh ultimately I think that for investors who are just hyperfocused on every minute of what this company is doing that could be viewed as a slight uh negative also keep in mind the stock is up 30% of the last 3 weeks just shy of 5% of its all-time highs and so you generally there's just a ton of noise around the quarter but I think this Blackwell piece is probably the most important X Factor about the quarter and so that's kind of why I think that uh this the stock is going to trade down modestly but I don't think that that uh that stock action should be representative of the opportunity Nvidia over the next couple years so I mean this is a company that does have a history of overd delivering uh regardless of the promises it makes you think this time will be different and if so if it does trade down you think the knock on effect for other big Tech names could be even more sizable in magnitude I think that that that's the risk this week of course and just to to zero in on the next five days is that the market is going to be this is the only thing that matters to the AI trade uh this week it's obviously the biggest factor in general but of course with the earnings and so yes I think that if there is a modest pullback I think if there's anything around Blackwell I think that that could be perceived as a negative for kind of broader Tech that especially the mega caps have enjoyed uh some of this AI movement here I still think we're very early in this but again I I want to to to to frame in that I think that that trading in the near term doesn't impact uh what's ultimately going to happen and I think that uh investors are going to get hyperfocused uh this week but it's ultimately going to probably Miss what is uh what I still believe is the biggest opportunity we've seen in 20 years I still think that we are in the early Innings of a three to fiveyear Tech bull market that's powered by Ai and I think that all these U many of these big tech companies are going to do well over the next couple years as as that starts to go so uh yes I think this is going to be uh probably a more difficult week for uh broader uh big Tech but I think that ultimately Shares are going to recover quickly as investors come to grips what I think is a stronger AI trade than what many believe is today according to estimates from Barclays hyperscalers the leading suppliers of enormous data centers and cloud services are expected to invest roughly $500 billion over the next two years in expanding their massive infrastructure this is because they plan to use their data sets to improve sales of everything from drive-through meals to the most intricate pharmaceutical testing according to technology Market researchers at caly investments from Amazon Microsoft and meta platforms drove the 19% increase in Cloud infrastructure spending during the second quarter of this year which came to approximately $ 78.2 billion based on predictions from Barclays hyperscalers are expected to invest over $500 billion in expanding their huge infrastructure over the next two years the business that has contributed most to the Dow Jones Industrial Average snp500 and NASDAQ Composite reaching all-time highs will be revealed tomorrow August 28th Wall Street will be able to assess and vidia's operating performance during the last 3 months as the company will be removing the proverbial Hood perhaps even more significant than any of the data releases I just discussed is this one while Nvidia sales and net income are likely to be the focus of attention for investors there is a much more significant measure to look for that will give a broader context on the state of the artificial intelligence AI Revolution and nvidia's future it is essential to give background information on how we arrived at this point before delving deeper into this crucial parameter put otherwise an explanation is required for nvidia's explosive growth from a market worth of $360 billion at the end of 2022 to a valuation of approximately $3.2 trillion as of August 23 2024 the closing bell this historic move is being driven by AI as you may have correctly surmised High compute data centers quickly adopted nvidia's h100 Graphics Processing Unit GPU as their GPU of choice these chips are essentially the brains of generative AI Solutions large language model llm training and split-second decision making unquestionably Nvidia has benefited greatly from its kud day software platform as well the tool set used by developers to create LM and maximize the performance of gpus is called cuda in order to retain Enterprise clients faithful idia ecosystem of products and services qva and the h100 are collaborating flawlessly the fact that Enterprise demand for nvidia's AI gpus is far higher than Supply is the second crucial component of the problem a good or Services price often Rises until demand taper offs when Supply cannot keep up with the demand the average price range for nvidia's h100 is between $330,000 and $440,000 more than twice as much as the competing Advanced Micro Devices chip the Mi 300X so what does this really mean for nvidia's stock let's find out but first if you made it this far into the video thank you these videos take a lot of effort and time to make so if you enjoyed them please hit the like button subscribe to the channel this goes a long way in helping us grow that said back to the video get your final bullet point here final one is systems contributing to big order numbers so what this means basically as we get into next year we're seeing companies or their big system so not only Blackwell chips to replace their current Hopper or previous architectures they're building entire data centers and some are even talking about 1 million GPU clusters so that would be significantly High than even the current market is something like four5 millionar million unit GPU so there will be significant increase to the numbers for next year just these systems on their own could add over 100 billion to revenues so that's the bull case youan but before everybody piles in aana walk us through some of the the downside risk to Nvidia that you see so Jorge we spoke about it a a little bit supply chain delays and them not delivering on time by like 3 to six months that could really push back the the numbers in the short term that for us would be a buying opportunity on the other hand if we do see a Slowdown in demand or period of of digestion where companies that have already ordered these chips need to spend some time to um actually put them to use that would actually be a a cyclical downturn these are Hardware stocks so they could see down Cycles as well do you ever run as a bull do you ever get nervous when everyone seems to be on the same side of the ship like everybody loves in video I mean I think something like 90% or something like that of analysts tell their clients this was to buy does that get you nervous or do you think you sometimes the her can be right absolutely Josh we are very nervous all the time and this is why we do deep nously this is why we do Deep dive work and really keep doing these Channel checks keep talking to customers understanding what their needs are what are going to be the use cases and that kind that's kind of how we build conviction around uh around earnings and long-term uh thesis all right so you like n video Let's when examining nvidia's fiscal second quarter operating results which are scheduled for release after the closing bell on August 28th bear this AIG GPU scarcity in mind over the last five quarters or the full fiscal year 2024 and the first corner of fiscal year 2025 Nvidia has utterly defied wall Street's most optimistic sales and earnings projections given that Wall Street experts have a track record of beating consensus estimates it wouldn't be at all surpris surprising if nvidia's net income and revenue exceeded forecasts once more however the picture is not fully told by these two headline figures consider nvidia's gross margin for a more comprehensive understanding of the company's State as well as the state of the AI Revolution when analyzing viia I usually focus on its adjusted gross margin which takes acquisition-based costs and stock-based compensation out of the equation the world's top chip manufacturer Taiwan semiconductor manufacturing has significantly increased its chip on wafer on substrate capacity which has helped Nvidia sell more h100 gpus however the majority of nvidia's growth has come as a result of its extraordinary GPU pricing power nvidia's adjusted gross margin jumped from 64.6 3% to 78.3 5% in just 5 quarters due to its capacity to charge between 50% and 75% % more than competing igpus after the fiscal first quarter results of Nvidia which concluded on April 28 the management requested an adjusted gross margin for the fiscal second quarter of 75.5% this would indicate a decrease from the previous quarter of between 235 and 335 basis points although this could simply be management being cautious as costs of goods rise in tandem with new orders a signific ific drop in adjusted gross margin could potentially indicate a change in the AI environment once again the central thesis has been the scarcity and strong demand of AI driven gpus competitive pressures would become eved very quickly if nvidia's adjusted gross margin falls short of its earlier estimate or if its Outlook necessitates a further retraction in gross margin even if there is a sizable backlog of orders for its Blackwell chip it is possible that companies will choose to use less expensive AI GPU substitutes that they can acquire more quickly there are first mover advantages in the AI sector and some companies won't want to have to wait months for their orders to be filled this makes it easier for Samsung Advanced Micro Devices and other Hardware manufacturers to piler Priceless real estate from ey accelerated data centers we may also determine whether Nvidia is facing internal competitive challenges by looking at its adjusted gross margin the magnific 7 which includes the four biggest clients for the company account for about 40% of nvidia's net sales