Wall Street analysts are updating their coverage of Nvidia (NVDA -0.79%) as the leading name in artificial intelligence (AI) prepares to release its next quarterly earnings report on May 22.
Earlier this week, Jefferies analyst Blayne Curtis said his firm thinks investors should be buying Nvidia stock and raised his price target from $780 to $1,200 per share. That would represent a gain of about 27% with the current share price near $945. But investors may be apprehensive after the high-flying stock has already had a monster run. Nvidia shares have more than tripled in the last 12 months alone.
Nvidia is the "favorite"
The bottom line is Curtis sees Nvidia as the established leader in the pole position of a growing AI ecosystem. Curtis succinctly summarized his firm's thoughts this way: "We believe it's too early to sift out winners and losers in the AI basket yet, but Nvidia is our favorite."
The basis of that thinking revolves around surging demand for Nvidia's products, which include much more than its powerful computing chips. Nvidia has already been surprising investors -- and itself -- time after time. Its fiscal 2024 fourth quarter (ended Jan. 28) was the third straight period in which the company beat its own revenue guidance by more than $2 billion.
Nvidia expects to report revenue of $24 billion for its fiscal 2025 first quarter. That would represent year-over-year growth of more than 230%. Business is booming as Nvidia provides more and more solutions to customers. Its AI infrastructure solutions, for example, include liquid-cooled rack systems featuring dozens of its Grace CPU (central processing unit) and new Blackwell GPU (graphics processing unit) chips.
Dominating growing AI ecosystems should keep Nvidia's revenue and earnings growing for quite some time. The stock is volatile and could drop if earnings even slightly disappoint the market's very high expectations, but as Curtis has pointed out, shares are likely to continue moving higher in the long run.
