Nvidia (NASDAQ:NVDA) is set to release its fiscal third-quarter results after the market closes on Tuesday, November 21. The company has been the top performer among S&P 500 companies, with an impressive yearly gain of over 222%, surpassing the S&P 500 Index (SPX) rally of 14.3%. Interestingly, analysts maintain a positive outlook for NVDA’s Q3 performance, expecting further growth in its stock.
Overall, analysts expect Nvidia’s Q3 adjusted earnings to soar to $3.37 from $0.58 in the same quarter last year. Revenue is also projected to rise 173% year-over-year to $16.2 billion.
Ahead of the earnings release, 10 top-rated analysts have assigned a Buy rating to NVDA stock. Notably, TipRanks ranks analysts based on their ability to deliver higher returns through recommendations. Susquehanna analyst Christopher Rolland expects a strong quarter from NVDA, attributing the company’s improved performance to an enhanced supply chain and a solid backlog. Furthermore, Rolland believes that Nvidia will benefit from efforts to increase capacity at existing suppliers. In line with this, he raised his price target to $625 from $600.
Goldman Sachs analyst Toshiyari Hari also expects strong Q3 results from Nvidia, along with encouraging forward guidance. He finds the stock’s risk/reward profile to be attractive at current levels. Specifically, Hari highlights the strong performance of Nvidia’s data center and gaming segments, with Q3 data center revenue projected to rise 20% sequentially to $12.4 billion and gaming revenue expected to increase by 14% to $2.82 billion.
The average price target of analysts for NVDA is $648.01, implying a 31.5% upside potential from current levels. Additionally, Wall Street maintains a highly bullish outlook on Nvidia, with a Strong Buy consensus rating based on 37 Buys and one Hold.
Options traders are pricing in a potential +/- 7.82% move on Nvidia’s earnings. Historically, NVDA shares have experienced an average upward move of 5.86% in the last eight quarters. It is worth noting that the stock reacted minimally, gaining only 0.1%, to the fiscal second-quarter results.
Nvidia’s dominant position in the AI space allows it to benefit from advancements in generative AI. The company’s efforts to introduce new products, address supply chain issues, and the positive momentum in its data center and gaming businesses are key factors supporting its performance.
