NVIDIA (NASDAQ:NVDA) is gearing up to announce its fiscal first quarter 2025 results, a highly anticipated event in the stock market. The chip giant has been a significant player in the market rally, consistently surpassing estimates and driving optimism around AI technologies. However, there are concerns about whether NVIDIA will be able to maintain this trend in its upcoming earnings report.
Bank of America’s Vivek Arya, a top-ranked analyst on Wall Street, believes that while NVIDIA is expected to beat Street estimates, the bar has been set so high that anything less than a stellar performance could disappoint investors. Expectations from bullish investors are well above consensus estimates, with projected sales of $26 billion for the quarter, a 6% increase from the consensus of $24.6 billion. Additionally, gross margins are expected to peak at 77% in the first quarter, but a drop to 75-76% in the second quarter is anticipated.
Arya points out that even meeting these bullish expectations might not be enough to satisfy investors, as concerns about slowing sales growth and fluctuating gross margins could lead to a negative reaction in the stock price. On the other hand, a positive outcome with modest progress in the first quarter and strong guidance for the second quarter could boost investor confidence in NVIDIA’s growth potential.
Overall, Arya rates NVDA stock a Buy with a $1,100 price target, indicating a potential 16% growth in the coming months. The analyst community also supports NVIDIA, with a Strong Buy consensus rating based on 40 Buys against just 2 Holds. The average target price of $1,057.76 suggests a 12% increase in the stock price in the near future.
In conclusion, while there is optimism surrounding NVIDIA’s earnings announcement, there are concerns about the company’s ability to meet or exceed high expectations set by previous quarters. The stock could face short-term challenges depending on the outcome of the results, but analysts remain positive about NVIDIA’s long-term growth prospects. Investors are advised to conduct their own analysis before making any investment decisions.
Article Source
https://www.tipranks.com/news/bank-of-america-chimes-in-on-nvidia-stock-ahead-of-earnings
