Benchmark maintains NVIDIA stock buy rating, $190 target

On Thursday, Benchmark analysts maintained a Buy rating and a $190.00 price target for NVIDIA Corporation (NASDAQ:NVDA), expressing confidence in the company’s financial performance and product adoption. The analysts highlighted NVIDIA’s impressive 66% stock increase over the past year, which aligns with InvestingPro data showing a total return of 66.86%. With a market capitalization of $3.11 trillion and a perfect Piotroski Score of 9, NVIDIA’s current trading price appears fairly valued according to InvestingPro’s proprietary Fair Value model. They acknowledged the mixed investor sentiment leading up to the earnings announcement, with some concerned about AI spending and others eager for a reason to re-engage with NVIDIA’s stock.

Following NVIDIA’s earnings release, which the analysts described as largely positive, there was particular enthusiasm for the rapid adoption of the company’s Blackwell products. This adoption contributed to better-than-expected earnings results and guidance, reminiscent of NVIDIA’s strong performance in early 2024. InvestingPro data reveals impressive revenue growth of 152.44% and robust financial health metrics, with 18 additional exclusive ProTips available to subscribers. Despite the positive earnings, NVIDIA’s prioritization of meeting the high demand for Blackwell has led to a focus on manufacturing volume over production efficiency, impacting near-term gross margins.

NVIDIA’s gross margin guidance for the first quarter stands at 71%, a decrease from 73.5% in the fourth quarter, 75% in the third quarter, and a peak of 78.9% in the first quarter of the previous year. The company anticipates a rise in gross margins to the mid-70s by the end of the fiscal year, as Blackwell production scales and manufacturing costs are optimized. Current InvestingPro data shows a trailing twelve-month gross profit margin of 75.86%, with detailed margin analysis available in the comprehensive Pro Research Report, which covers over 1,400 top US stocks. The analysts predict that NVIDIA’s gross margin in the second quarter will likely remain stable or see a slight increase to between 71.0% and 71.5%.

The report concluded with the analysts’ belief that NVIDIA’s margin projections are in line with its previous forecasts and should have already been factored into market expectations.

In other recent news, NVIDIA Corporation has reported strong financial performance, with revenue and earnings per share surpassing consensus estimates for the January quarter. The company’s guidance for a 9% quarter-over-quarter revenue increase in the April quarter, estimating $43 billion, has been well-received by analysts. JPMorgan maintained an Overweight rating with a $170 price target, while Needham reiterated a Buy rating and set a $160 target, citing robust demand for NVIDIA’s Blackwell architecture. Truist Securities slightly raised its price target to $205, emphasizing NVIDIA’s operational developments and increased customer interest following the DeepSeek initiative. Raymond (NSE:RYMD) James also maintained an Outperform rating with a $170 target, highlighting the anticipated success of the Blackwell product over the previous Hopper revenue. Evercore ISI echoed a positive sentiment with an Outperform rating and a $190 target, noting NVIDIA’s strong demand outlook and the successful ramp-up of Blackwell revenues, which hit $11 billion in the January quarter. Despite some concerns about gross margins, NVIDIA expects them to rebound to the mid-70% range by the end of the year. Analysts have generally expressed confidence in NVIDIA’s future prospects, particularly in AI and datacenter computing, as evidenced by the company’s strategic positioning and adaptability in the market.

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