Nvidia Earnings Fall Short of High Expectations, but Analysts Remain Bullish

Despite some projections from NVIDIA Corporation (NASDAQ: NVDA) falling short of market expectations, analysts maintain a positive outlook on the chipmaker. The company continues to benefit from strong demand driven by artificial intelligence (AI) and a solid product pipeline.

Nvidia‚s shares dropped over 4.5% in premarket trading on Thursday, even as the company exceeded profit expectations for the May-July quarter and announced a $50 billion share buyback. However, the firm’s revenue guidance for the current quarter—approximately $32.5 billion—missed some estimates, and its gross margin outlook indicated a slowing growth rate compared to previous quarters.

Nvidia also acknowledged challenges with its upcoming Blackwell line of advanced AI chips, though these are still set to launch by the fourth quarter.

Analysts’ Reactions and Price Target Revisions

Truist Securities:
Truist downplayed concerns over the Blackwell delays, describing them as „much ado about nothing.“ The firm praised Nvidia’s strong performance in the AI sector and highlighted continued growth in its datacenter unit, as well as a range of new product offerings. Truist raised its price target for Nvidia to $148 from $145, maintaining a Buy rating and urging investors to „look through the fog.“

Jefferies:
Jefferies acknowledged that expectations for Nvidia were sky-high going into the earnings release. While the current-quarter guidance was decent, it wasn’t enough to meet these elevated expectations. However, Jefferies believes the concerns over Blackwell delays are now behind Nvidia, with the line still expected to contribute significantly to revenues alongside the existing Hopper chips. The firm maintained its Buy rating with a $150 price target, indicating a 19% upside from current levels.

Wolfe Research:
Wolfe Research noted that while Nvidia’s growth pace appears to be slowing, the firm’s bullish stance remains intact, driven by strong revenue prospects from the upcoming Blackwell line. Wolfe emphasized the importance of a timely launch for Blackwell in ensuring Nvidia’s future earnings growth, maintaining an Outperform rating with a $150 price target.

Bernstein:
Bernstein analysts raised their price target from $130 to $155 following Nvidia’s earnings report. They highlighted the company’s ability to deliver amidst high expectations and anticipate continued sequential growth in the datacenter segment into year-end. Bernstein also expects additional revenue from Blackwell to bolster further growth in fiscal Q4, despite a slight margin decline due to the product ramp-up.

Wells Fargo:
Wells Fargo increased its price target for Nvidia from $155 to $165, recommending that investors „buy the pullback.“ The bank’s analysts found few negatives in Nvidia’s latest earnings and future guidance, expressing confidence in the company’s forward-looking Blackwell cycle.

Bank of America (BofA):
BofA acknowledged potential short-term volatility in Nvidia’s stock due to the modest Q3 sales outlook, which slightly exceeded consensus but fell short of more optimistic forecasts. Despite rising costs associated with the Blackwell ramp, BofA remains confident in Nvidia’s „unique growth opportunity“ and dominant market position, urging investors to „ignore the quarterly noise.“

Conclusion

While Nvidia’s recent earnings report and forward guidance have led to a mixed market reaction, the overall sentiment among analysts remains strongly positive. With AI-driven demand and the upcoming Blackwell product launch, Nvidia is expected to continue its growth trajectory, albeit with some near-term challenges. Analysts largely recommend taking advantage of any stock pullback as a buying opportunity, citing the company’s long-term potential.

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