Analysts overhaul Nvidia stock price targets after Q2 earnings

Updated at 9:39 AM EDT

Nvidia shares slipped in early Thursday trading, but pared the worst of their post-earnings declines, as a host of Wall Street analysts rushed to update ratings and price targets on the AI-chip maker following its highly anticipated July-quarter update.

Nvidia ( NVDA ) , which holds a commanding lead in the production of chips and processors that power AI systems worldwide, posted record revenue of $30.04 billion for its fiscal second quarter and saw profit more than double from the year-earlier period to 68 cents a share.

Related: 7 takeaways from Nvidia's big earnings report

The group also suggested that current-quarter revenue would continue to improve, albeit at a slower pace, as it forecast a top-line tally of $32.5 billion despite some delays in the shipment of its new line of Blackwell processors owing to design changes and supply-chain snarls.

Nvidia said it executed a "change to the Blackwell [graphics-processing-unit] mask to improve production yield." The Santa Clara, Calif., group added that the ramp is "scheduled to begin in the fourth quarter and continue into fiscal 2026."

"We're sampling functional samples of Blackwell, Grace Blackwell, and a variety of system configurations as we speak," Nvidia CEO Jensen Huang told investors on a conference call late Wednesday. "There are something like 100 different types of Blackwell-based systems and we're enabling our ecosystem to start sampling those."

"The functionality of Blackwell is as it is, and we expect to start shipping out in Q4," he said, adding that demand for Nvidia's legacy Hopper chips is "really strong" and the appetite for Blackwell is "incredible."

Blackwell revenue boost

Finance chief Colette Kress said Blackwell should generate "several billion" in revenue for Nvidia's fiscal fourth quarter, which ends in January. She said that Hopper sales would accelerate over the second half of the year.

That has proved important for investors, who had worried that the Blackwell launch would trigger some cancellation or postponement of Hopper orders as customers waited for the new and more powerful processors and systems to hit the market.

Related: Nvidia earnings top forecast, but Blackwell delay signal hits stock

The Blackwell ramp, however, will likely eat into Nvidia's profit margins, which narrowed modestly to 75.7% in the second quarter and will likely settle at the 75% level over the near term.

"Despite lower-than-expected gross margin guidance, Nvidia’s data center revenue opportunity across cloud, consumer internet, and enterprise customers remains strong," said Goldman Sachs analyst Toshiya Hari, who reiterated his conviction-buy rating and $135 price target on Nvidia stock following last night's earnings update.

"With a redesign of the Blackwell GPU, management expects several billion dollars in revenue in FY4Q, supported by growing Hopper revenue," he added.

Blackwell delay a 'nothing burger'

JP Morgan analyst Harlan Sur had a similar take, noting the the two-month delay in Blackwell GPU shipments shouldn't affect Nvidia's overall revenue profile given that it's "offset by Hopper's strong performance."

"We expect gross margins to improve throughout next year, with Nvidia maintaining a strong lead over competitors with its aggressive product launch cadence," said Hur, who added $40 to his Nvidia price target, taking it to $155 a share.

Related: Nvidia stock price tied to 5 key items in Q2 earnings report

Cantor Fitzgerald analyst C.J. Muse, who reiterated his $175 price target and overweight rating on Nvidia stock, said worries about the Blackwell delay "appear to be a nothing burger ahead of one of the biggest and baddest product cycles in Nvidia’s history."

"We do not see any change to the AI story underpinning Nvidia, and think (today’s) potential pullback is simply another buying opportunity," he added.

That view was echoed by Piper Sandler analyst Harsh Kumar, who also held to his $140 price target and overweight rating following last night's earnings update.

"The company is well-positioned to capitalize on strong AI demand with Hopper and Blackwell," Kumar said. "Gross margins are expected to stabilize, supporting continued growth."

Nvidia expectations remain high

Bernstein SocGen Group analyst Stacy Rasgon, who raised his Nvidia price target by $25 to $150 a share, said the group "continues to deliver amidst high expectations with strong data center growth and several billion dollars of Blackwell revenue expected in Q4."

"Hopper demand remains strong, and we anticipate significant growth next year driven by diversified customers and expanding AI opportunities," he added.

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Edward Jones analyst Logan Purk took a more conservative view, reiterating his hold rating on Nvidia. He said that while the group "remains the leader in high-performance GPUs and commands a 90% market share in data centers for accelerator chips," management will be challenged to continually exceed expectations.

"We believe the stock appropriately reflects our optimistic growth outlook and is appropriately valued," Purk said.

Nvidia shares were marked 1.8% lower in early Thursday trading, with more than 10 million shares in volume, to change hands at $123.32 each.

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