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Cantor maintains Overweight rating on NVIDIA shares post-earnings

Published 29/08/2024, 12:00
Cantor maintains Overweight rating on NVIDIA shares post-earnings
NVDA
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Cantor Fitzgerald has reaffirmed its positive stance on NVIDIA Corporation (NASDAQ: NASDAQ:NVDA), maintaining an Overweight rating and a $175.00 price target for the stock. The firm's analyst highlighted NVIDIA's solid performance despite worries over the delay of the Blackwell product. NVIDIA reported a $2 billion beat against its guidance and anticipates a $2.5 billion quarter-over-quarter growth for the third quarter.

The forecast surpasses previous sequential guides of $1.9 billion and $2 billion.

The analyst noted that NVIDIA's guidance for gross margins (GMs) for the calendar year 2024 remains steady at mid-70%, although this suggests a fourth-quarter figure that could fall short of consensus expectations, potentially around 72-73% versus the anticipated 75.6%. This is attributed to the impending Blackwell launch and increased pricing from TSMC starting January 1. However, it is expected that higher average selling prices and improved top-line growth will consistently support mid-60% operating margins (OMs).

NVIDIA's Data Center growth is projected to be quite significant next year, according to the company's CEO. The analysis by Cantor Fitzgerald suggests that the company's advancements in artificial intelligence (AI) are too critical for the hyperscalers and consumer internet companies to ignore, and the firm sees no alteration to the AI narrative that supports NVIDIA's business.

Cantor Fitzgerald has increased its calendar year 2025 earnings per share (EPS) estimate for NVIDIA to $4.00 and sees a clear path to $4.50 or even $5.00. At the after-hours trading price of $117, the firm believes NVIDIA's stock is undervalued, trading at 29x/26x/23x future earnings, which is considered too attractive to overlook.

In other recent news, NVIDIA Corporation has seen a flurry of analyst activity following its recent financial performance. Jefferies maintained a Buy rating with a $150 target, despite earnings falling short of heightened expectations, and emphasized strong demand for NVIDIA's Hopper products.

KeyBanc also reaffirmed an Overweight rating and a $180 target, citing NVIDIA's leadership in the General AI sector and its ability to navigate the Blackwell GPU delay.

Barclays reiterated an Overweight rating with a $145 target, highlighting key developments that suggest a positive trajectory for NVIDIA, despite the company's guidance not meeting market expectations.

DA Davidson maintained a neutral stance with a $90 target, noting NVIDIA's robust revenue growth, especially in the Data Center sector. Raymond James lifted its price target to $140, maintaining a Strong Buy rating, and expressed optimism about NVIDIA's top-line momentum carrying forward.

InvestingPro Insights

Adding to the analysis by Cantor Fitzgerald, InvestingPro data provides a real-time snapshot of NVIDIA's financial health and market performance. NVIDIA Corporation (NASDAQ:NVDA) boasts a robust Piotroski Score of 9, indicating strong financial conditions which may be appealing for investors seeking companies with solid fundamentals. Additionally, NVIDIA's status as a prominent player in the Semiconductors & Semiconductor Equipment industry is reinforced by its impressive revenue growth, with the last twelve months as of Q1 2025 showing a staggering increase of 208.27%. This growth trajectory aligns with analysts' expectations of continued sales growth in the current year.

Furthermore, NVIDIA's market capitalization stands at an adjusted $3090.0 billion, reflecting its substantial presence in the market. Despite trading at a high earnings multiple with a P/E ratio of 72.84, the company's performance justifies investor confidence, as demonstrated by a high return of 157.56% over the past year. For investors looking for more in-depth analysis, there are over 19 additional InvestingPro Tips available, offering valuable insights into NVIDIA's financial metrics and stock performance. These tips can be explored further at InvestingPro, where users can tap into a wealth of expert analytics to inform their investment decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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