Wall Street analysts have shared their thoughts on semiconductor giant Nvidia’s (NVDA) “underwhelming” second-quarter beat. This was evident from NVDA stock’s 3% decline in extended trading yesterday. Nvidia surpassed both sales and earnings estimates, but the beat and the Q3 guidance were not as exceptional as prior results. Let’s briefly review Nvidia’s Q2 results from two of Wall Street’s top analysts.
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Goldman Sachs Expects NVDA to Decline
In his “First Take” post-Q2 results, Goldman Sachs analyst James Schneider reiterated his Buy rating on NVDA stock and maintained his price target of $200, which implies 10.1% upside potential. Nvidia’s sales of $46.7 billion came in marginally below Schneider’s forecast of $47 billion but above the Street’s consensus. Meanwhile, NVDA’s gross margin of 72.4% was in line with his expectations, and operating margin of 64.5% surpassed them.
Furthermore, Nvidia’s Q3 sales guidance of $54 billion at the midpoint matched the Street’s estimate but came in lower than Schneider’s forecast of $57 billion. Following this update, Schneider predicted that NVDA stock will “trade down modestly” as the results did not meet the elevated expectations.
Mizuho Sees Nvidia as the AI Leader
Mizuho Securities’ top analyst Vijay Rakesh reiterated his Buy rating on NVDA stock but lowered the price target from $215 to $205, implying nearly 13% upside potential. Despite the cut, Rakesh noted that Nvidia remains the clear leader in artificial intelligence (AI), holding about 70% market share in a $3 to $4 trillion AI infrastructure market opportunity by 2030.
Mizuho sees Nvidia’s Q2 sales and Q3 guidance as broadly in line with expectations, despite the absence of H20 chip sales to China due to export controls. He highlighted the strength in the data center and networking revenues, noted ongoing chip ramps, and cited a potential upside if China sales resume in late 2025.
He believes Nvidia is successfully executing its product roadmap, with GB200 and NVL72/36 chips scheduled to ramp up in 2025, while also increasing its AI server content through the Grace CPU (central processing unit).
Is NVDA a Good Stock to Buy Now?
On TipRanks, NVDA stock has a Strong Buy consensus rating based on 35 Buys, three Holds, and one Sell rating. The average Nvidia price target of $199.66 implies 9.9% upside potential from current levels. Year-to-date, NVDA stock has surged over 32%.
Please note that most of these ratings were issued before the Q2 results and may change once analysts revisit them.
