Evercore ISI maintains NVIDIA stock with $190 target

On Thursday, Evercore ISI affirmed their positive stance on NVIDIA Corporation (NASDAQ:NVDA), maintaining an Outperform rating and a $190.00 price target. Following NVIDIA’s recent earnings call, Evercore ISI’s analysis highlighted the company’s strong performance and addressed investor concerns regarding potential challenges. InvestingPro data reveals NVIDIA’s exceptional financial health with a perfect Piotroski Score of 9, demonstrating strong operational efficiency and robust financial position.

NVIDIA reported a robust 9% beat on April quarter (AprQ) earnings per share (EPS) and provided a July quarter (JulQ) EPS outlook that was slightly below consensus by 1%. Despite these results, investors had expressed worries about delays in the Blackwell chip/system, a period of capital expenditure digestion by hyperscalers, and threats from Application-Specific Integrated Circuits (ASICs). The company’s impressive 75% gross profit margin and substantial revenue growth of 114% year-over-year underscore its operational excellence. For deeper insights into NVIDIA’s financial metrics and growth potential, check out the comprehensive Pro Research Report available on InvestingPro.

According to Evercore ISI, NVIDIA has successfully mitigated these concerns. The data center (DC) business has seen a significant year-over-year growth of 73%. The yields of the Blackwell system are on the rise and have contributed to 70% of the data center revenue. Additionally, major hyperscalers are deploying an average of 72,000 Blackwell GPUs each week. The forthcoming next-generation Blackwell chip, the GB300, is expected to start production later in the current quarter.

Evercore ISI’s findings align with independent checks indicating that hyperscalers are not reducing their capital expenditures. Instead, there is a growing demand for larger language learning models (LLMs), and Tier 2 Cloud Service Providers (CSPs) are increasing their demand both domestically and internationally. NVIDIA continues to be the preferred choice in the AI ecosystem, which reinforces the confidence in the company’s ongoing growth and market position.

In other recent news, NVIDIA Corporation reported April-quarter revenues of $44 billion, exceeding both JPMorgan’s and consensus estimates of $43 billion. Despite a $2.5 billion revenue impact from GPU shipment restrictions to China, NVIDIA’s revenue guidance for the July quarter is set at $45 billion. Analysts from Citi raised their price target for NVIDIA to $180, citing strong sales and improved gross margins. Deutsche Bank (ETR:DBKGn) adjusted its price target to $145 following NVIDIA’s financial disclosures, which showed resilience amid trade restrictions. Bernstein maintained an Outperform rating with a $185 target, highlighting NVIDIA’s transparent management approach amidst regulatory challenges in China. Summit Insights upgraded NVIDIA to a Buy rating, noting the company’s potential to overcome industry challenges and achieve outperformance. Analysts are optimistic about NVIDIA’s Blackwell product line, with sales surpassing expectations and contributing significantly to revenue. The company’s strategic planning and focus on AI and datacenter markets continue to attract positive attention from investors.

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