'Over-Achiever' Nvidia Warms Sell-Side, Retail As Bullish Analyst Says Path For $4 Trillion Market Cap Laid Out

Nvidia Corp. ($NVDA) shares alternated between gains and losses as traders reacted to the artificial intelligence chip maker’s fiscal year 2025 third-quarter results released late-Wednesday.

The market may have become skeptical regarding Nvidia following the results but sell-side analysts are unanimously positive about the near- and medium-term outlook.

A slew of analysts upped their price targets for the stock, according to the Fly. Goldman Sachs, Barclays, JPMorgan, Needham and Wedbush hiked their respective price targets by $15 each. 

Uniquely Positioned: Nvidia is uniquely positioned in the next wave of artificial intelligence (AI), namely enterprise, in NeMo, which enables enterprise-level customization, and NIM micro-service offerings, said Baird analyst Tristan Gerra.

Industrial AI in the form of Omniverse, is also part of the next-wave of applications, he added.

Baird’s industry conversation echoed Nvidia’s sentiment that no severe issue such as overheating is impacting Blackwell demand.

"No demand slowdown in sight, as Nvidia expects worldwide data center 'modernization' from coding to generating AI to be ongoing over the next five years," the firm said.

Delving into the soft gross margin guidance, Gerra said the 12-month new AI product cadence has a slight compression effect on gross margin but it would help maintain Nvidia's AI market share above prior expectations and above 75%.

Gerra reiterated an “Outperform” rating and lifted the price target for the stock from $150 to $95.

Steep Blackwell Ramp In The Cards: Morgan Stanley analyst Joseph Moore said the September quarter proved to be a transitional period . "All indications continue to be that there will be a strong Blackwell ramp, though supply will be the limiter for Blackwell through CY25," he said.

Moore maintained an “Overweight” rating and raised the stock price target from $160 to $168. Nvidia is Morgan Stanley’s top semiconductor picks, due to strong visibility into the Blackwell ramp and high conviction relative to peers.

"On peak earnings power we still see the stock as less expensive than other AI beneficiaries, while everything else in semis continues to suffer from cyclical pressures," the analyst said.

Over Achievement Continues: Daiwa Capital Markets’ Louis Miscioscia said Nvidia’s “over achievement” continues even as the Street estimates continue to go higher. The analyst said his impression is “positive.”

He attributed the post-earnings sell-off to "high expectations," and previous stock price appreciation. "AI is big and could be bigger than world changing events like the PC, smartphone, Internet, etc," he said.

Daiwa rates Nvidia an "Outperform."

Another Earnings Performance For The Ages: Wedbush analyst Daniel Ives said he would characterize the results as "another earnings press release from Nvidia that should be framed and hung in the Louvre given these eye popping results and unprecedented growth from the Godfather of AI Jensen [Huang] and Nvidia."

Calling Blackwell, as the "LeBron of chip releases," the analyst said the AI chip appears to be ramping even faster than expected.

Ives called the guidance “conservative.” 

“We believe the path to $4 trillion market cap and beyond is now laid out by Nvidia and this is bullish for the broader tech rally into year-end and 2025,” he said.

NVDA sentiment and message volume November 21, 2024, as of 2:40 pm ET | Source: Stocktwits

The retail crowd is firmly behind Nvidia. On Stocktwits, the sentiment meter was ‘extremely bullish’ (87/100), accompanied by ‘extremely high’ message volume.

A retail watcher highlighted Huang’s statement on the earnings call in which he said, “we are not just creating a new piece of software, we are creating a new industry.”

Another said once the stock crosses the $150 threshold, it could be upward and onward. “It’s a race to $200,” the user said.

As of 2:40 pm ET, Nvidia shares rose 1.38% to $147.91.