Nvidia stock wavered Thursday as investors considered quibbles with the AI chipmaker's beat-and-raise earnings report.
The Santa Clara, Calif.-based company late Wednesday reported better-than-expected results for its fiscal third quarter but its sales guidance for the current period was only modestly above views. Nvidia stock fell in after-hours trading following the Q3 report.
On the stock market today, Nvidia stock rose 0.5% to close at 146.67. In intraday trading, it swung from being down 3.6% to being up 4.8%.
Most Wall Street analysts liked what they heard from Nvidia. At least 18 analysts raised their price targets on Nvidia stock after the company's fiscal Q3 report.
Wedbush Securities analyst Daniel Ives said Nvidia provided its usual conservative guidance. In a client note, Ives said the company tends to "underpromise and overdeliver."
Bernstein analyst Stacy Rasgon reiterated his outperform rating on Nvidia stock and raised his price target to 175 from 155.
"While outlook was perhaps a touch below some of the more bullish whispers, it seems respectable enough amid supply constraints," Rasgon said in a client note.
Nvidia's outlook appears conservative, given the uptick in the company's sales forecast for Blackwell chips in the current quarter as well as continued strong demand for Hopper chips, he said.
Nvidia said it is in full production of Blackwell, its next-generation artificial intelligence chip.
"Blackwell demand still appears off the chart, and is likely to exceed supply for some time to come with the prospect for a very strong forthcoming data-center year still easily in the cards," Rasgon said.
Nvidia Stock Dips On Gross Margin Concerns
One guidance nitpick was the company's forecast for lower gross profit margins during the production ramp of Blackwell.
Nvidia expects its gross margins to tick down to the "low 70s" early in the fiscal year before rising back to the "mid 70s" later in the year. Its gross margin in fiscal Q3 was 74.6%.
Truist Securities analyst William Stein kept his buy rating on Nvidia stock and upped his price target to 169 from 167.
In a client note, Stein said that Nvidia's fiscal Q4 revenue guidance "was just 'good' rather than 'great.' "
Melius Research analyst Ben Reitzes kept his buy rating on Nvidia stock with a price target of 195.
Nvidia isn't going to lose Blackwell chip sales to other chipmakers amid its supply constraints, he said.
"Constraints would matter more if customers could just plug in a competitive chip and it acted the same with software — but that isn't the case when you basically invented the whole space," Reitzes said in a client note.
He added, "There is not one channel check that shows a lack of interest in new Blackwell systems."
JPMorgan analyst Harlan Sur concurred.
Nvidia "continues to maintain a 1-2 step lead ahead of competitors with its silicon/hardware/software platforms, and a strong ecosystem," Sur said in a client note. He rates Nvidia stock as overweight and increased his price target to 170 from 155.
Other AI-Affiliated Stocks To Benefit
On a conference call with analysts, Nvidia Chief Financial Officer Colette Kress said, "Blackwell demand is staggering, and we are racing to scale supply to meet the incredible demand customers are placing on us."
Nvidia's fiscal Q3 report offered positive read-throughs for other stocks linked to the AI data center market, Evercore ISI analyst Amit Daryanani said in a report.
He cited Amphenol, Arista Networks, Dell Technologies, Hewlett Packard Enterprise and Vertiv.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
