On Friday, Jefferies, a global investment banking firm, updated its outlook on NVIDIA Corporation (NASDAQ:NVDA), raising the price target from $150.00 to $185.00. The firm has reaffirmed its Buy rating on the stock. The adjustment comes amid expectations of continued strong performance from the tech company, which is anticipated to report a significant beat and raise in the vicinity of $2 billion.
The analyst from Jefferies highlighted the robust demand for NVIDIA's products, particularly as the company progresses with the Blackwell product ramp-up. According to the firm's analysis, the sentiment from hyperscale customers is overwhelmingly positive. The main challenge for cloud revenue growth remains the supply of GPUs, not the demand.
NVIDIA's Blackwell architecture is expected to contribute 'a few billion' dollars this quarter, with projections of further growth as the GB200 starts to contribute in small volumes in the next quarter. Additionally, the Hopper architecture is reportedly still in the growth phase, fulfilling prior deployment commitments.
In light of these developments, Jefferies has revised its estimates to better reflect the anticipated Blackwell ramp. The firm observed that consensus estimates for NVIDIA's revenue and earnings per share (EPS) for the next year are increasing, with $200 billion in revenue and $5 of EPS considered the low end of market expectations. Some estimates even extend to $6 of EPS.
While acknowledging the potential for unit sales to outperform, the analyst from Jefferies cautioned that some projections might be overly optimistic regarding average selling prices (ASPs). This caution stems from misconceptions about NVIDIA's sales strategies, particularly the belief that the company would sell entire racks for the GB200 NVL. Jefferies' own estimates suggest data center revenue closer to $180-200 million, compared to the buy-side expectations ranging from $205-215 billion.
In other recent news, NVIDIA has witnessed a series of price target upgrades due to robust demand for its AI accelerators and anticipation of strong earnings results. Analysts at Oppenheimer, Raymond (NS:RYMD) James, Wedbush Securities, HSBC, and Susquehanna have all increased their price targets, citing factors such as strong demand for NVIDIA's Hopper architecture, Blackwell processors, and the company's growth in the data center sector.
NVIDIA's recently launched Blackwell platform is expected to contribute significantly to the company's revenue in the coming quarters, despite existing supply constraints. The company's rack-scale solutions are seen as a significant revenue driver, offering a substantial increase in average selling price compared to individual modules.
Additionally, NVIDIA, in collaboration with SoftBank (TYO:9984) Corp, has launched the world's first combined artificial intelligence and 5G telecommunications network, known as an artificial intelligence radio access network (AI-RAN). This development has potential applications in various sectors, including autonomous vehicles and robotics control.
Analysts have projected strong earnings for NVIDIA. For instance, HSBC expects NVIDIA's third-quarter fiscal year 2025 sales to reach $35.3 billion, surpassing both management's guidance and consensus estimates. Looking ahead to the fourth quarter of fiscal year 2025 and the first quarter of fiscal year 2026, HSBC's sales forecasts are $38.0 billion and $42.7 billion, respectively.
In the semiconductor sector, both Citi and Redburn-Atlantic have given NVIDIA a 'buy' rating, reflecting a positive outlook on the company's prospects in the field of accelerated computing. These developments provide insight into the recent activities and analyst sentiment surrounding NVIDIA.
InvestingPro Insights
NVIDIA's impressive performance, as highlighted in the Jefferies analysis, is further supported by real-time data from InvestingPro. The company's market capitalization stands at a staggering $3.6 trillion, reflecting its dominant position in the semiconductor industry. NVIDIA's revenue growth is particularly noteworthy, with a 194.69% increase over the last twelve months as of Q2 2025, aligning with the article's emphasis on strong demand and anticipated beats in financial performance.
InvestingPro Tips underscore NVIDIA's financial strength and market position. The company boasts a perfect Piotroski Score of 9, indicating robust financial health. This score, combined with NVIDIA's impressive gross profit margins and analysts' anticipation of continued sales growth, supports Jefferies' bullish outlook.
While the article discusses potential misconceptions about average selling prices, it's worth noting that NVIDIA is trading at a high earnings multiple with a P/E ratio of 68.06. This valuation reflects the market's strong confidence in NVIDIA's future growth prospects, particularly with the Blackwell product ramp-up mentioned in the article.
For investors seeking a more comprehensive analysis, InvestingPro offers 22 additional tips on NVIDIA, providing deeper insights into the company's financial health and market position.
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