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Investing.com -- Evercore ISI analysts told investors in a note Monday that they are buyers of Nvidia shares ahead of this week’s earnings report, arguing that demand momentum, improving supply and attractive valuation leave the market underestimating the chipmaker’s growth outlook.
The firm reiterated its Outperform rating and $261 price target and said it is “buyers of NVDA in front of its Oct-Q earnings call,” scheduled for Nov. 19 after the market close.
Evercore ISI expects Nvidia to deliver a “beat/raise quarter,” citing channel checks showing that “GB200 and GB300 availability has greatly improved yet demand still outstrips supply.”
Despite Nvidia’s rally this year, the analysts note that the stock trades at “NTM P/E ratio of 30x, below the 9-yr median of 35x,” and at a 2026 PEG ratio of “0.55x,” which they called “well-below parity” and far lower than the 1.4x average across their AI coverage.
The firm contrasted today’s AI spending cycle with the dot-com era. In the 1990s, Evercore ISI wrote, companies “spent on installing dark-fiber capacity in the hope that internet demand would materialize.”
In Nvidia’s case, “AI capacity is being installed in conjunction with demand rather than in anticipation of it.” The analysts also pointed to Amazon’s comment that it is monetizing new capacity “as soon as it is deployed.”
Cloud capital spending is a major driver. Evercore ISI forecasts hyperscaler cloud CapEx to grow “72% in 2025,” up from 56% in 2024, and noted that current Street estimates for 2026 remain conservative.
The firm said Street projections for Nvidia’s Blackwell and Rubin compute revenue “sum to only $335bn” for 2025–26, compared with Jensen Huang’s indicated “pipeline of $500bn,” suggesting meaningful upside.
Addressing concerns about Nvidia’s growing index influence, Evercore ISI noted that the combined PC and networking ecosystem of INTC, MSFT, DELL and CSCO once reached a “14% weighting” in the S&P 500, providing historical precedent for further expansion.