On Thursday, Rosenblatt Securities increased its price target on NVIDIA (NASDAQ:NVDA) shares to $220 from $200, while maintaining a Buy rating on the stock. The firm recognized NVIDIA's robust performance in the recent October quarter and provided a positive outlook for the January quarter, driven by higher-than-anticipated demand for its Hopper products.
The company's Blackwell product line is also anticipated to experience a significant supply ramp-up, as it is expected to be sold out for the next several quarters.
NVIDIA's guidance indicates a potential decline in the January quarter, which follows an unexpectedly prolonged cycle. Despite this, the analyst suggests several factors to consider, including the resolution of previously overestimated power issues related to Blackwell, a temporary weakness in networking during October due to the timing of Blackwell's release, and a gaming outlook that appears constrained as NVIDIA prioritizes its Blackwell and Hopper wafers.
The firm also notes that gross margins (GM) may be pressured for the next two to three quarters as NVIDIA manages a complex infrastructure ramp-up involving various configurations. This GM pressure is expected to continue slightly longer into FY26, with margins potentially dropping into the low 70% range before returning to mid-70% levels.
In summary, Rosenblatt Securities has reiterated its Buy rating on NVIDIA, citing the company's successful quarter and outlook, an improved demand profile for Blackwell in 2025, and the dismissal of concerns regarding power issues with the new ramp.
These factors are believed to outweigh the short-term challenges in networking, gaming constraints where AMD (NASDAQ:AMD) may gain, and the trajectory of gross margins. The new price target of $220 is based on a 44x P/E multiple applied to the firm's projected FY27 earnings per share (EPS).
In other recent news, NVIDIA has been the subject of several analyst adjustments following its robust financial performance. The company reported record-breaking total revenue of $35.1 billion, surpassing expectations.
The revenue outlook for the next quarter was set in line with market forecasts at $37.5 billion. Despite this, Cantor Fitzgerald maintained its Overweight rating on NVIDIA, even as the firm's gross margin forecast for the April quarter fell slightly below consensus estimates.
The company's latest product, Blackwell, is expected to drive growth, with potential revenues of $5-6 billion predicted for the January quarter. Amid high demand, this upward trend is expected to accelerate significantly throughout the calendar year 2025 and beyond.
Analysts from firms such as Benchmark, Needham, Melius Research, Goldman Sachs, and Bernstein SocGen Group have all increased their price targets for NVIDIA, reflecting the company's strong financial performance and potential for continued growth.
These recent developments highlight NVIDIA's strong financial performance and strategic position within the rapidly expanding AI industry. The company's Blackwell production is reportedly ahead of schedule, with shipments expected to surpass previous forecasts. Analysts from various firms have updated their stances, reflecting the ongoing adjustments in market expectations based on their performance and industry developments.
InvestingPro Insights
NVIDIA's remarkable performance, as highlighted by Rosenblatt Securities, is further substantiated by InvestingPro data. The company's revenue growth stands at an impressive 194.69% over the last twelve months, with a quarterly growth of 122.4% in Q2 2025. This aligns with the analyst's positive outlook on NVIDIA's Hopper and Blackwell product lines.
InvestingPro Tips reveal that NVIDIA has a perfect Piotroski Score of 9, indicating strong financial health. This score, combined with the company's impressive gross profit margins of 75.98%, supports Rosenblatt's confidence in NVIDIA's future performance, even as they anticipate potential short-term pressure on gross margins.
The company's P/E ratio of 67.04 might seem high at first glance, but when considering the PEG ratio of 0.16, it suggests that NVIDIA is trading at a low P/E ratio relative to its near-term earnings growth. This metric aligns with Rosenblatt's decision to maintain a Buy rating and increase the price target.
For investors seeking a more comprehensive analysis, InvestingPro offers 22 additional tips on NVIDIA, providing a deeper understanding of the company's financial position and market performance.
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