Analyst Projects Nvidia's AI Accelerator Sales to Surpass Expectations

Investment firm Cantor Fitzgerald anticipates that Nvidia's new Blackwell AI accelerators will drive significant demand for AI computing. Analyst C.J. Muse projects the company will surpass Wall Street expectations in its upcoming earnings report, forecasting second-quarter revenue of $48 billion and earnings per share (EPS) of $1.06, compared to consensus estimates of $45.8 billion and $1.00. For the third quarter, Muse expects revenue and EPS to reach $55 billion and $1.25, respectively, exceeding forecasts of $52.6 billion and $1.18. Consequently, he raised his price target for Nvidia to $240 and maintained a Buy rating.

Muse also highlighted the potential impact of Nvidia's re-entry into the Chinese market. The U.S. government recently approved export licenses allowing Nvidia to sell its H20 AI chips in China, following a previous ban due to national security concerns. Under the agreement, Nvidia will pay 15% of its China revenue to the U.S. government. While this opens a new revenue stream, Muse cautioned that U.S. export taxes and Chinese government concerns about security could limit the scale of those sales. Nonetheless, since China was already "de-risked" in previous projections, any revenue generated from that market would be a bonus rather than a requirement to meet expectations.

Nvidia is scheduled to report its quarterly earnings on August 27. Muse emphasized that despite past slowdowns in Nvidia's earnings surprises since its July 2023 "Big Bang" guidance, the upcoming quarter could mark the beginning of a new period of stronger results.