Analyst revamps Nvidia stock price with key earnings update on deck

Updated at 10:29 AM EDT

Nvidia shares moved higher in Friday trading as investors looked to the AI-chip maker's critical second quarter report and a top Wall Street analyst issued a bullish call on its broader tech market impact.

Nvidia ( NVDA ) , which reports second quarter earnings next week, has rebounded firmly from its early month lows, adding more than $600 billion in market value since the yen-carry-trade-triggered turmoil that roiled global stocks on Aug. 5.

The stock's momentum could be key to solidifying broader market sentiment heading into the autumn as well, as investors have been questioning the veracity of AI-related investment spending and weighing the impact of the first quarterly underperformance for the Magnificent 7 tech stocks in at least two years.

In fact, Wedbush analyst Dan Ives says Nvidia's earnings are likely to highlight "potentially the most important week for the stock market in years," given that the tech giant has "the best perch and vantage point to discuss overall enterprise AI demand and the appetite for Nvidia's AI chips looking forward."

With those lofty expectations established, Ives' colleague, Wedbush analyst Matt Bryson, added $18 to his Nvidia price target, taking it to $138 a share, while keeping his 'overweight' rating in place.

Nvidia's Blackwell chip revenue in focus

Bryson said he sees both "stronger second-quarter results and robust third-quarter guidance" from the chipmaker next week. He expects a bottom line for the three months ended in July of 67 cents a share on revenue of $30 billion.

Wall Street forecasts are pointing to a consensus bottom line of 64 cents a share a 137% increase from the last year, with revenues more than doubling to $28.55 billion.

Nvidia told investors in May that current-quarter revenue would rise to around $28 billion, at the time stronger-than-expected estimate assuaged investors' concern about delays for orders of H100 chips tied to the launch of its new Blackwell processors.

Related: Goldman Sachs analyst revisits Nvidia stock price target ahead of earnings

Investors will focus on reports that delivery of its newly launched line of Blackwell processors, which are meant to be faster, cheaper, and more efficient than its H100 Hopper predecessors, could be delayed due to design flaws.

Analysts had forecast Blackwell to start contributing to Nvidia's top-line growth in the third quarter and find their way into global customer data centers by the year's final three months.

Hyperscalers poised to spend big on infrastructure

That demand, as well as Nvidia's commanding market share, is predicted to drive the group's data center revenue as high as $150 billion next year, powered largely by this year's Blackwell launch.

Hyperscalers, the major providers of massive data centers and cloud services, are poised to spend around $500 billion over the next two years building out their massive infrastructure, according to estimates from Barclays.

The goal is to leverage their massive datasets to enhance sales of everything from drive-through dining to the most complicated pharmaceutical testing.

Still, some analysts are also starting to question the pace of AI spending from hyperscalers such as Microsoft ( MSFT ) , Meta Platforms ( META ) , Amazon ( AMZN ) , and Google parent Alphabet ( GOOGL ) and the resultant demand for the high-end chips and processors produced by Nvidia.

Related: Big names exit Nvidia stock as AI giant stumbles before earnings

Ives at Wedbush says Nvidia's near-term outlook will be crucial for the direction of broader tech stocks, who estimates that "for every $1 spent on an Nvidia GPU chip there is a $8-$10 multiplier across the sector."

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"The stage is set for tech stocks to move higher into year-end and 2025 ... as the Fed gets in position to start its rate cutting cycle, macro soft landing remains the path, and tech spending on AI remains a generational spending cycle just starting to hit the shores of the tech sector," Ives said.

Nvidia shares were marked 4.7% higher in early Friday trading to change hands at $129.48, a move that would extend the stock's six-month gain to around 65%.

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