On Thursday, Citi reiterated its positive stance on NVIDIA (NASDAQ:NVDA), maintaining a Buy rating and a $150.00 price target for the stock. The firm's outlook follows NVIDIA's reported earnings, which exceeded expectations and provided a robust forecast. NVIDIA's July-Quarter (Jul-Q) sales reached $30 billion, aligning with the higher end of the anticipated $29-$30 billion range. Additionally, the October-Quarter (Oct-Q) guidance was set at $32.5 billion, meeting the midpoint of the expected $32-$33 billion.
The management expressed confidence in the upcoming ramp of their Blackwell product, with production beginning in the Oct-Q and projecting several billion in sales for the January-Quarter (Jan-Q). Despite this optimism, the company anticipates a reduction in gross margins over the next two quarters due to a higher mix of H200/HBM products. Citi noted that while this might lead to lower gross margins, their January-Quarter earnings per share (EPS) estimate remains unchanged, although they expect the consensus among other analysts may decrease.
Citi's analysis suggests that NVIDIA's stock price may stay within a certain range during the next two quarters. The firm anticipates a significant uptick in year-over-year sales and gross margins starting in the April-Quarter (Apr-Q), driven by the Blackwell product.
The next major event likely to influence the stock, according to Citi, is the Consumer Electronics Show (CES) in January, which could serve as a catalyst.
The firm also highlighted the ongoing growth in artificial intelligence (AI) adoption, which is still in the early to mid-stages, particularly as enterprise AI demand surges with the development of AI agents. NVIDIA is expected to see a 10 to 20-fold increase in data compute needs over the long term. Citi's maintained price target of $150 is based on a consistent ~35x price-to-earnings (P/E) multiple applied to the calendar year 2025 (CY25) EPS estimates.
In other recent news, NVIDIA Corporation (NASDAQ:NVDA) has been the focus of numerous analyst reviews following its latest earnings announcement. Goldman Sachs maintained its Conviction Buy rating on NVIDIA, citing the company's Data Center growth potential as a significant factor for optimism.
The firm also increased NVIDIA's price target to $135.00. UBS reaffirmed its Buy rating with a $150 target on NVIDIA, pointing to a substantial rise in NVIDIA's purchase commitments and supply obligations as a key indicator of future growth. Despite a projected dip in gross margins, UBS expects robust revenue growth in the upcoming quarters.
Cantor Fitzgerald maintained an Overweight rating on NVIDIA with a target of $175.00, highlighting NVIDIA's solid performance despite concerns over the delay of the Blackwell product. The firm increased its calendar year 2025 earnings per share (EPS) estimate for NVIDIA to $4.00.
Jefferies reiterated a Buy rating and a price target of $150.00 for NVIDIA, emphasizing strong demand for its Hopper products. The firm pointed out that the delay of the Blackwell product is no longer a concern, with revenue projections in the billions expected to start in the fourth quarter.
KeyBanc maintained an Overweight rating and a $180.00 price target on NVIDIA, citing NVIDIA's leadership in the General AI sector. The firm expressed confidence in NVIDIA's ability to navigate the Blackwell delay and capitalize on its market position.
InvestingPro Insights
As NVIDIA (NASDAQ:NVDA) continues to navigate the dynamic semiconductor landscape, the latest InvestingPro data and tips provide a deeper financial context for investors following Citi's positive outlook. NVIDIA's market capitalization stands at an impressive $3090.0 billion, reflecting its significant industry presence. Despite a high P/E ratio of 72.84, which may suggest a premium valuation, the company has demonstrated substantial revenue growth, with a remarkable 208.27% increase in the last twelve months as of Q1 2023.
InvestingPro Tips highlight NVIDIA as a prominent player in its industry, with analysts anticipating further sales growth in the current year. The company's strong financial health is evident, with liquid assets surpassing short-term obligations and cash flows that can comfortably cover interest payments. Moreover, NVIDIA has maintained dividend payments for 13 consecutive years, which could be a sign of its commitment to shareholder returns. It is worth noting that there are over 19 additional InvestingPro Tips available that can offer further insights into NVIDIA's financial performance and market position.
For investors considering the long-term potential of NVIDIA, the company's significant role in the AI sector and its promising Blackwell product line are key factors to watch. With Citi's maintained Buy rating and a $150.00 price target, NVIDIA's upcoming developments, such as the Consumer Electronics Show presentation, may provide additional momentum for the stock. The InvestingPro platform offers a comprehensive analysis of NVIDIA, including a fair value estimate of $109.5 USD, which investors can compare against analyst targets and market sentiment.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.