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Investing.com - Wolfe Research maintains its positive stance on Nvidia (NASDAQ:NVDA) ahead of the company’s earnings report scheduled for release after market close on Wednesday. With a strong analyst consensus recommendation of 1.34 (Buy) and 15 analysts recently revising earnings estimates upward, expectations remain high for the semiconductor giant.
The market is pricing in a 6.4% one-day move in Nvidia’s stock price following the earnings announcement, though Wolfe notes historical patterns suggest the actual movement might be less dramatic. InvestingPro data shows Nvidia’s beta at 2.27, confirming the stock’s high volatility relative to the market, with price targets ranging from $140 to $350.
Despite Nvidia shares rising 35% year-to-date, the company’s next-twelve-month price-to-earnings multiple has contracted from 31x to 29.5x, occurring as the Nasdaq 100 index trades 7% below its recent highs. While Nvidia’s current P/E ratio stands at 52.25, its PEG ratio of 0.79 suggests the stock may be reasonably valued relative to its growth prospects. According to InvestingPro, which offers comprehensive analysis on over 1,400 US equities through its Pro Research Reports, Nvidia’s Fair Value assessment indicates the stock is currently trading near its intrinsic value.
Wolfe attributes recent technology sector weakness to multiple factors, including concerns about AI ecosystem financing, reduced expectations for a December Federal Reserve rate cut (now at approximately 45% probability), seasonal hedge fund de-grossing, and positioning ahead of employment data.
The research firm maintains that concerns about an AI bubble bursting are "overblown" for the near term and recommends buying AI-related stocks during price weakness, though it suggests waiting for either an upside Nvidia surprise or more oversold technical indicators before becoming more aggressive buyers.
In other recent news, Brookfield Asset Management has launched a $10 billion artificial intelligence infrastructure fund, with significant backing from Nvidia, the Kuwait Investment Authority, and contributions from Brookfield’s own balance sheet. This initiative has already secured $5 billion in commitments. Meanwhile, AI chip rental startup Lambda announced that it raised over $1.5 billion in a Series E funding round, led by TWG Global and involving other investors like the US Innovative Technology Fund. In anticipation of Nvidia’s upcoming earnings report, BNP Paribas Exane and Stifel have both raised their price targets for Nvidia to $250, maintaining an Outperform and Buy rating, respectively. BNP Paribas Exane expects a "classic marginal beat/raise" scenario for Nvidia’s fiscal third-quarter 2026 results. Stifel’s price target increase follows Nvidia CEO Jensen Huang’s keynote highlighting strong demand for AI infrastructure, supported by substantial cumulative orders. Additionally, Japan’s RIKEN plans to deploy two new supercomputers powered by NVIDIA systems for advanced AI and quantum computing research. These developments underscore the growing momentum in AI infrastructure and technology investment.
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