Nvidia’s (NVDA) Q1 Earnings Could Be a ‘Positive Clearing Event’ for Investors, Says Top Analyst

AI giant Nvidia (NVDA) is set to report its Q1 FY26 earnings on May 28. Analysts expect earnings of $0.88 per share on revenue of $43.26 billion. Cantor Fitzgerald analyst C.J. Muse, who has an Overweight rating and $200 price target on the stock, says this earnings call could be a “positive clearing event” for investors. Muse, a five-star analyst, believes the report will ease investor concerns and provide a “strong line-of-sight” for growth in the second half of the year. With improving fundamentals and clear demand drivers, he sees “meaningful upside” and keeps Nvidia as a “Top Pick.”

It is worth noting that Muse ranks 247 out of more than 9,558 analysts tracked by TipRanks. He has a success rate of 61%, with an average return per rating of 22.4% over a one-year timeframe.

Blackwell Strength May Soften China Hit

Nvidia is expected to take a $15 billion hit to its Data Center revenue in 2025 due to H20 chip restrictions in China. Despite this, Muse thinks the company’s July-quarter guidance will come in close to expectations. He projects revenue of $46 billion, just slightly below the $46.3 billion Wall Street average. This estimate includes a $5 billion loss from China but is partly balanced by strong early demand for Nvidia’s new Blackwell chips.

Looking beyond the near term, Muse is confident in Nvidia’s ability to grow its Data Center business. He pointed to better visibility around “rack-scale shipment acceleration” for the Blackwell platform. In particular, he sees a meaningful ramp-up in GB300 chip shipments starting in the fourth quarter, with about 25,000 units expected to ship in 2025. Based on this momentum, Muse believes Data Center revenue could climb to $200 billion next year — well ahead of the current $175 billion estimate, even after factoring in the impact from China.

Management May Stay Upbeat on AI Spending

Looking ahead to 2026, Muse expects Nvidia’s management to stay positive about long-term AI spending. He does not expect formal guidance for 2026 just yet, but he thinks the team will strike an optimistic tone. He also expects gross margins to stay in the “mid-70s” in the second half of 2025, which would match previous comments.

In addition, he believes Nvidia will highlight new areas of demand, such as “AI Factories and Physical AI,” which could drive future growth.

Valuation Leaves Room for Gains

Muse also commented on Nvidia’s valuation. Even after the stock’s recent rally, Nvidia’s valuation remains attractive, trading at just 26.8x and 19.9x his projected earnings for 2025 and 2026. This indicates that the stock still has room to climb, as profit growth picks up.

Is NVDA a Good Stock to Buy?

Turning to Wall Street, analysts have a Strong Buy consensus rating on NVDA stock based on 34 Buys, five Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average NVDA price target of $164.51 per share implies 24.82% upside potential.

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