Nvidia (NASDAQ:NVDA) has been the poster child of the current bull market, riding a wave of unprecedented growth. However, even the strongest stocks hit speed bumps. Lately, Nvidia has encountered a couple – delays to its highly anticipated Blackwell GPU architecture and the unexpected rise of Chinese AI startup DeepSeek.
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With the chip giant set to report its January quarter (FQ4) earnings on Wednesday (Feb 26), investor sentiment isn’t as euphoric as it was last year. But should that be cause for concern? Not in the slightest, says KeyBank’s John Vinh, a 5-star analyst ranked in the top 2% of Wall Street pros.
“Despite prior concerns regarding constraints associated with the ramp of GB200 NVL servers, we expect NVDA to report strong F4Q results, which we anticipate will solidly beat, and to guide F1Q conservatively and moderately higher than consensus,” Vinh asserts.
Yes, GB200 NVL server rack shipments have been slower than expected due to manufacturing bottlenecks. But according to Vinh, several key factors more than offset this issue.
For one, lower initial yields for the GB200 NVL have likely led customers to pivot toward HGX-based B200 servers with x86 head nodes. Meanwhile, demand for H20 GPUs from Chinese cloud service providers (CSPs) has soared – partly thanks to DeepSeek and the limited availability of Huawei’s Ascend AI ASIC. Moreover, Nvidia’s customers, particularly CSPs, are effectively “financing its inventory” at electronics manufacturing services (EMS) providers, meaning shipments to EMS translate directly into recognized revenue.
With these tailwinds in mind, Vinh has revised his estimates upward. He now expects F4Q revenue and EPS to come in at $40 billion and $0.89, up from his previous forecast of $38.2 billion and $0.85 (compared to the Street’s $38 billion and $0.84). For F1Q, he’s calling for $43 billion in revenue and $0.94 EPS, raised from $42.2 billion and $0.92, while the consensus stands at $41.7 billion and $0.91.
To this end, confident that Nvidia’s strong results will quell fears about DeepSeek threatening near-term AI capital expenditures, Vinh has upped his price target from $180 to $190, implying a ~41% upside from current levels. Naturally, his Overweight (i.e., Buy) rating remains firmly in place. (To watch Vinh’s track record, click here)
Vinh isn’t alone in his optimism. Of the 32 analysts covering Nvidia, 30 rate it a Buy, with just 2 opting for a Hold – solidifying its Strong Buy consensus. With an average price target of $179.77, analysts project Nvidia shares could trade 33% higher over the next year. (See NVDA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
