Investors and the investment community are eagerly awaiting Nvidia’s third-quarter earnings report, scheduled for Wednesday, Nov. 20. Nvidia, considered the poster child of artificial intelligence (AI), holds significant influence over the health of the AI market. Positive news from the company tends to result in an upward movement in the stock, impacting the entire capital markets.
Analysts from Morgan Stanley and UBS have recently raised their price targets on Nvidia stock to $160 and $185, respectively, indicating potential upside between approximately 10% and 28%. These updated price targets reflect the bullish sentiment on Wall Street even before the earnings report.
The upcoming earnings report is expected to be anything but typical, as Nvidia’s cohorts in the big tech industry have signaled increased investment in AI infrastructure. Analysts are keen to assess the potential tailwind these investments may provide for Nvidia’s growth prospects. The launch of Nvidia’s new Blackwell GPU is a key talking point, with projections of at least $10 billion in sales this year. However, concerns arise regarding operational challenges related to manufacturing and production, as the company is rumored to be shifting order flow away from Super Micro Computer.
While short-term gains following the earnings report are anticipated, some investors are cautious about the long-term narrative. Nvidia’s stock has experienced significant growth in recent years, with gains of 758% since the release of OpenAI’s ChatGPT in 2022, 205% over the last year, and 198% year-to-date in 2024. This prompts a consideration of whether the stock can sustain such substantial growth in the future.