Nvidia Bulls Defend Ahead of Earnings Amidst Cautious Notes
Key Takeaways:
* Nvidia (NVDA) analysts remain bullish despite challenges.
* Some analysts caution about subdued first quarter outlook.
* Nvidia's long-term growth potential remains high.
Nvidia continues to attract investor support as the chipmaker approaches its earnings report next week. Despite concerns raised by DeepSeek regarding AI costs, certain analysts maintain an optimistic outlook.
Loop Capital's Ananda Baruah reiterates a $175 price target, anticipating a 25% upside. He emphasizes Nvidia's strong potential in accelerated computing and generative AI, highlighting a $1 trillion market opportunity in each segment.
However, some analysts express caution, citing factors such as DeepSeek's potential impact on AI demand, chip delays, and elevated market expectations for the first quarter.
Evercore analyst Mark Lipacis identifies three reasons for a more guarded tone: DeepSeek's lower AI demand, its shift away from Nvidia GPUs, and delays with Blackwell chips.
China-based DeepSeek's unveiling of its AI model, RI, has raised concerns about overspending on AI infrastructure. Snowflake CEO Sridhar Ramaswamy believes DeepSeek's cost-effective model challenges previous assumptions.
Despite these concerns, analysts generally expect a modest fourth-quarter beat for Nvidia. However, the first quarter outlook may face headwinds due to the Blackwell transition, declining Hopper sales, and China restrictions.
BofA analyst Vivek Arya anticipates post-results volatility but expects positive momentum to resume as investors look forward to Nvidia's product innovations and market expansion. Arya's $190 price target is among the most aggressive on the Street.
Yahoo Finance data indicates a slight downward trend in Nvidia's first-quarter EPS estimates. Long-term estimates for 2025 EPS have remained stable.