On Thursday, Cantor Fitzgerald maintained a positive outlook on NVIDIA (NASDAQ:NVDA), reiterating an Overweight rating and a $175.00 price target for the company's stock. The firm's stance comes despite NVIDIA's October quarter revenues surpassing buy-side expectations at $35.1 billion compared to the anticipated $33.0 billion, but with the January quarter revenue guidance falling slightly short at $37.5 billion versus the buy-side's projection of over $38 billion.
Additionally, NVIDIA's gross margin forecast for the April quarter is set at approximately 71-72.5%, which is below the consensus estimate of 73.2%.
The analyst notes that the initial ramp-up of NVIDIA's Blackwell product is tracking better than expected, with potential revenues of $5-6 billion compared to the initial $3 billion estimate for the January quarter. This upward trend is predicted to accelerate significantly throughout the calendar year 2025 and beyond, amid high demand that could lead to product shortages in the coming quarters.
The analyst anticipates a more substantial sequential revenue increase in the April quarter, with gross margins expected to bottom out and then rise back to around 75% in the second half of 2025. These projections underpin the bullish case for NVIDIA, with Data Center revenues and earnings per share (EPS) potentially reaching over $200 million and $5.50, respectively, in the calendar year 2025, with $6.00 per share being a possibility.
While the buy-side is already aligned with the $5.50 EPS projection, the focus remains on the sustainability of NVIDIA's growth into the calendar year 2026. The analyst points to the booming age of artificial intelligence, which is driving an exponential increase in computing demand. NVIDIA's CEO, Jensen Huang, does not foresee a slow-down until at least $1 trillion worth of Data Centers are modernized.
With NVIDIA's aggressive annual technology releases, including the expected Rubin in late 2025 or early 2026 and the standalone VERA CPU in 2026, the firm anticipates that the company's strong performance will continue well into 2026.
Cantor Fitzgerald highlights the upcoming four "goldilocks months" as particularly supportive for NVIDIA's stock, anticipating positive updates from the company during the Consumer Electronics Show (CES), a guide for re-accelerated top-line growth in February, and the March GPU Technology Conference (GTC). The firm reasserts NVIDIA as its top pick, with expectations of the stock pushing higher based on these events and the company's robust technology pipeline.
In other recent news, NVIDIA has been making significant strides with its financial performance and strategic advancements, catching the attention of several investment firms. The company reported a record-breaking total revenue of $35.1 billion, surpassing expectations. The revenue outlook for the next quarter aligns with market forecasts at $37.5 billion.
Analysts from Benchmark, Needham, Melius Research, Goldman Sachs (NYSE:GS), and Bernstein SocGen Group have all increased their price targets for NVIDIA, reflecting the company's strong financial performance and potential for continued growth.
The company's latest product, Blackwell, is expected to drive growth despite potential short-term pressure on gross margins. NVIDIA's CEO, Jensen Huang, has expressed confidence in the future of artificial intelligence (AI), which is expected to drive the expansion of cluster sizes and support NVIDIA's market dominance.
These are recent developments that highlight NVIDIA's strong financial performance and strategic position within the rapidly expanding AI industry. The company's Blackwell production is reportedly ahead of schedule, with shipments expected to surpass previous forecasts. The company has addressed investor concerns, particularly regarding the scaling of Large Language Models (LLMs), and reassured stakeholders about its production capabilities.
InvestingPro Insights
NVIDIA's remarkable performance, as highlighted in the article, is further substantiated by real-time data from InvestingPro. The company's revenue growth of 194.69% over the last twelve months and an impressive 122.4% quarterly growth underscore the analyst's bullish outlook. This exceptional growth is reflected in NVIDIA's market capitalization, which currently stands at a staggering $3.57 trillion.
InvestingPro Tips reveal that NVIDIA has a perfect Piotroski Score of 9, indicating strong financial health and performance. This aligns with the article's positive outlook on the company's future prospects. Additionally, the tip that "11 analysts have revised their earnings upwards for the upcoming period" supports Cantor Fitzgerald's optimistic stance on NVIDIA's potential earnings growth.
The company's gross profit margin of 75.98% and operating income margin of 61.87% demonstrate NVIDIA's efficiency in converting revenue into profit, which is crucial for sustaining the growth trajectory discussed in the article. These metrics reinforce the analyst's expectation of gross margins returning to around 75% in the second half of 2025.
For investors seeking a more comprehensive analysis, InvestingPro offers 22 additional tips on NVIDIA, providing a deeper understanding of the company's financial position and market performance.
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