Report Card Submitted: How Does Wall Street View NVIDIA?

NVIDIA's earnings report exceeded expectations. How are the major Wall Street firms analyzing it? I've summarized the overall outlook, and confidence in Blackwell chip sales remains strong.$NVIDIA(NVDA.US)

Morgan Stanley: Target Price Raised from $152 to $162, Maintains "Overweight" Rating

Morgan Stanley's research report indicates that NVIDIA's revenue for the fourth fiscal quarter ending in January rose by 77.9% year-over-year to $39.3 billion, surpassing both the firm's and market expectations. Gross profit met expectations, and non-GAAP EPS reached $0.89, exceeding expectations.

Morgan Stanley also predicts that the exceptionally strong demand for the Blackwell AI series chips will continue until the end of the year. Concerns about inference workload expansion, contrary to external worries, do not seem to affect training, and these transitional issues are being resolved. The upward trend brought by the Blackwell AI series chips is imminent. The firm expects NVIDIA to capture ASIC market share in the second half of the year and maintain the best sustainable growth momentum in the large AI semiconductor field. In summary, Morgan Stanley raised its target price from $152 to $162 and maintained its "Overweight" rating.

Bank of America: Raises Target Price, NVIDIA Could Rise Another 60% This Year

Bank of America Securities reiterated its "Buy" rating for NVIDIA, stating that the company remains a leader in driving the AI market towards compute-intensive inference, agent applications, and physical AI/robotics technology. The report notes that despite several challenges, NVIDIA's fourth-quarter sales reached $39.3 billion, up 78% year-over-year, exceeding market expectations by 3%. The company expects first-quarter sales to be $43 billion, about $1 billion above market expectations, implying a 66% year-over-year growth. Fourth-quarter Blackwell product sales were around $11 billion, far exceeding expectations, indicating smooth progress. However, the cost of expanding Blackwell production is expected to lower the first-quarter gross margin to 71%, below market expectations of 72%. The second quarter may be flat, with recovery expected in the second half of the fiscal year. Therefore, Bank of America Securities raised its EPS forecasts for NVIDIA for fiscal years 2026 and 2027 by 1% and 5% to $4.50 and $6.07, respectively, and raised its target price from $190 to $200.

Deutsche Bank: NVIDIA's Revenue Beat is the Smallest in Two Years

Deutsche Bank upgraded NVIDIA to a "Buy" rating with a target price of $156. The bank believes that NVIDIA's (NVDA.US) fourth-quarter earnings and revenue exceeded analysts' expectations due to strong AI demand, with revenue up 78% year-over-year. However, Deutsche Bank strategist Jim Reid emphasized that the revenue beat was the smallest in two years.

In a letter to clients, he wrote that for investors accustomed to larger upside surprises, NVIDIA's earnings report was disappointing, with only a slight beat on earnings and no particularly strong guidance, indicating that the report did not live up to the hype surrounding NVIDIA's stock over the past two years.