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Nvidia Shares Soar 3%: Analysts Boost Price Targets, Eyeing Impressive Earnings Report

As anticipation builds for Nvidia's quarterly earnings report next week, the company's shares are rallying, fueled by raised price targets from top analysts and increased demand in the AI technology sector.

Nvidia logo
Nvidia logo

An Impressive Surge in Trading

Shares of Nvidia (NASDAQ: NVDA) rose more than 3% in hefty trading volume on Tuesday. Two brokerages have increased their price targets for the chipmaker, further heightening expectations before the company’s quarterly earnings report next week.

Rallying Behind AI Technology

The world's most valuable semiconductor company, Nvidia, has been central to a technology stock rally this year. The optimism surrounding the potential of artificial intelligence and the demand for components powering this technology fuels this surge.

Trading Volume Tops Tesla

Over $22 billion worth of Nvidia's shares were traded by mid-day, outpacing $14 billion in trades for Tesla (NASDAQ: TSLA), typically Wall Street's most traded stock. Investor expectations are high, and there is anticipation for Nvidia to exceed them.

Share Fluctuations and Weekly Gains

Nvidia's shares increased as much as 3.5% before trimming gains, with a final rise of 1.7% at $445. This uptick brings the total gains for the week to an impressive 9%.

Impact on the Philadelphia Semiconductor Index

Nvidia was one of only three stocks trading higher in the Philadelphia semiconductor index on Tuesday. Strong U.S. retail sales data has sparked concerns over sustained high interest rates, affecting the broader stock market.

Nvidia as the 'Kingmaker'

Nvidia’s role in AI technology has prompted UBS analyst Timothy Arcuri to refer to the company as the "kingmaker." The increasing interest in AI software and specialized cloud infrastructure models has made Nvidia a sought-after investment.

Analysts Raise Price Targets

Ahead of the fiscal second-quarter report, analysts from various firms have raised their price targets. Arcuri lifted his target to $540 from $475, while Wells Fargo increased its target to $500 from $450, following Morgan Stanley naming Nvidia its "top pick."

Positioned as Primary Beneficiary in AI-Driven Transformation

Nvidia's pre-eminent position as a key beneficiary in the AI-driven architectural data center transformation makes it a challenging stock to bet against, according to Wells Fargo analyst Aaron Rakers.

Stock Surges Due to AI Chip Demand

On May 25, Nvidia's stock surged 24% after the company forecasted second-quarter revenue over 50% above Wall Street estimates. The increasing demand for Nvidia's AI chips, which power services like ChatGPT, has contributed to this spike.

Revenue Expectations

Analysts, on average, anticipate a 66% surge in Nvidia's quarterly revenue to $11.13 billion, according to Refinitiv. This compares to Nvidia's forecast for quarterly revenue of $11 billion, plus or minus 2%.