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On Thursday, Mizuho (NYSE:MFG) Securities adjusted its outlook on NVIDIA Corporation (NASDAQ:NVDA), increasing the price target to $170 from the previous $168 while maintaining an Outperform rating on the stock. The revision followed NVIDIA’s financial update, which revealed a slightly higher-than-anticipated revenue for the April quarter at $44.1 billion, surpassing the consensus estimate of $43.3 billion. This performance aligns with NVIDIA’s impressive 114.2% year-over-year revenue growth and its current market capitalization of $3.29 trillion. According to InvestingPro, NVIDIA maintains a perfect Piotroski Score of 9, indicating exceptional financial strength. The company also provided guidance for the July quarter, projecting revenues around $45 billion, which aligns with market expectations and eases concerns regarding potential headwinds in the second half of the year.
Mizuho’s analysis highlighted several key factors contributing to NVIDIA’s performance. Data Center Revenues were reported at approximately $39.1 billion, marking a 10% quarter-over-quarter increase and a significant 73% rise year-over-year. The revenue from Blackwell products was noted at around $24 billion, estimated from approximately 8,000 NVL72 racks. Blackwell shipments constituted 70% of NVIDIA’s total shipments, with the U.S. accounting for 47% of revenues. Hyperscalers represented less than half of the revenue stream. InvestingPro analysis shows NVIDIA maintains excellent financial health with strong profitability metrics, including a robust gross profit margin of 75%.
The report also detailed the upcoming product shipments, with the GB300 Ultra set to ship in the July quarter. Additionally, the July quarter is expected to see an acceleration in Blackwell and GB200 product ramps, with cloud service providers (CSPs) reportedly setting up over 1,000 racks per week. Furthermore, NVIDIA’s April quarter networking revenue was up 64% quarter-over-quarter, with NVLink and SpectrumX generating over $3 billion in revenue.
Despite a robust quarter, NVIDIA acknowledged a $4.5 billion charge to inventory related to the second half of 2020 challenges, including $2.5 billion in revenues that could not be shipped. This situation was previously noted by Mizuho and is expected to impact revenues by $8 billion in the July quarter. Mizuho reiterated its Outperform rating for NVIDIA and adjusted its estimates and price target to $170, taking into account the headwinds from China but also considering the positive offset from the Blackwell product ramps. For deeper insights into NVIDIA’s valuation and growth prospects, InvestingPro offers comprehensive analysis through its Pro Research Report, available alongside 18 additional key ProTips and extensive financial metrics.
In other recent news, NVIDIA Corporation has reported earnings that exceeded analysts’ expectations, despite facing challenges due to export restrictions on its H20 product. The company’s revenue guidance for the second quarter is set at $4.5 billion, which analysts received positively. However, firms like Stifel noted that without the H20 export restrictions, this forecast could have been significantly higher. Truist Securities raised its price target for NVIDIA to $210, maintaining a Buy rating, citing the company’s robust performance despite export control challenges. Meanwhile, DA Davidson increased its price target to $135 but kept a neutral stance, highlighting the impact of the absence of H20 product sales in China. Cantor Fitzgerald reiterated its Overweight rating with a $200 price target, expressing optimism about NVIDIA’s future revenue, particularly in AI technologies. Evercore ISI maintained an Outperform rating with a $190 target, noting strong growth in NVIDIA’s Data Center business and the ongoing deployment of Blackwell GPUs. These developments reflect a mixed but generally positive outlook from analysts on NVIDIA’s financial health and market position.
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