On Friday, an analyst from Melius reaffirmed a Buy rating on NVIDIA (NASDAQ:NVDA), with a steady stock price target of $160.00. NVIDIA is anticipated to continue its dominance in the GPU market, with no significant competitors challenging its full-stack approach in the next two years. This outlook is bolstered by the upcoming release of NVIDIA's Blackwell and Rubin GPU lines in calendar years 2024/2025 and 2025/2026 respectively.
The analyst has raised estimates for NVIDIA's future earnings per share (EPS), citing strong growth prospects, particularly in the Datacenter segment. For the fiscal year 2025, which ends in January 2025, EPS estimates have been increased to $2.71 from $2.69, with projected revenue growth of 96% to $119.5 billion, up from the previous forecast of $118.4 billion.
This includes an estimated 120% increase in Datacenter revenue to $104.6 billion, an uptick from the earlier prediction of $103.6 billion.
Looking ahead to fiscal year 2026, NVIDIA's EPS is now projected to be $3.71, up from the prior estimate of $3.43. This reflects an expected 38% surge in revenue to $164.4 billion, compared to the previously estimated $151.2 billion. Datacenter revenue for the same period is forecasted to grow by 41% to $147.7 billion, which is an increase from the earlier projection of $134.6 billion.
The positive trajectory continues into fiscal year 2027, with EPS estimates now at $4.47, up from $4.16. Revenue growth for this year is projected at 20%, reaching $196.8 billion, compared to the earlier forecast of $181.8 billion. The Datacenter segment is expected to see a 21% growth, with revenue potentially hitting $178.7 billion, an increase from the prior estimate of $163.5 billion.
The analyst's commentary underscores NVIDIA's strong position in the market and the expected continued growth in the coming years, particularly within the Datacenter sector. The reaffirmed Buy rating and price target reflect confidence in the company's future performance and product lineup.
In other recent news, Nvidia Corporation (NASDAQ:NVDA) has been at the forefront of several major market movements. The company's shares have surged significantly due to its dominance in the AI chip market, tripling in value over the past year. The company's revenues are projected to double to $120 billion this fiscal year. Nvidia's market value briefly surpassed that of Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL), positioning it as a leader in the tech sector.
Nvidia also lost its top position to Microsoft recently, ending a streak of record closing highs for the Nasdaq. Despite this, the company remains a significant player in the market, with its shares continuing to rise following new server orders from Elon Musk's AI startup.
In the pharmaceutical sector, Gilead (NASDAQ:GILD) and Sarepta Therapeutics (NASDAQ:SRPT) experienced significant gains following positive developments in their respective drug studies. These are just a few of the recent developments shaping the investment landscape.
In terms of analyst perspectives, some have expressed caution regarding Nvidia's future growth. For instance, Gil Luria, an analyst with D.A. Davidson, has a "neutral" rating on the stock. On the other hand, Ivana Delevska, founder and chief investment officer of Spear Invest, remains optimistic about Nvidia's shares.
Remember, these updates are based on recent news, and while they provide insights into the current state of the market, they do not predict future performance.
InvestingPro Insights
As NVIDIA (NASDAQ:NVDA) garners a reaffirmed Buy rating from analysts, it's worth noting that the company not only stands as a dominant force in the GPU market but also exhibits robust financial health and growth potential according to InvestingPro metrics. NVIDIA's market capitalization stands at an impressive $3210.0 billion, underscoring its substantial market presence.
While the P/E ratio of 75.66 indicates a premium market valuation, this could be justified by NVIDIA's exceptional revenue growth of 208.27% over the last twelve months as of Q1 2025. Furthermore, the company's gross profit margin during the same period is a healthy 75.29%, reflecting efficient operations and strong pricing power.
InvestingPro Tips suggest that NVIDIA has a perfect Piotroski Score of 9, indicating top-notch financial health, and analysts are expecting sales growth in the current year, aligning with the positive outlook presented by Melius.
Moreover, with 36 analysts having revised their earnings upwards for the upcoming period, investor confidence seems to be high. For those looking to delve deeper into NVIDIA's financials and future prospects, there are 22 additional InvestingPro Tips available, which can be accessed with the coupon code PRONEWS24 for an extra 10% off a yearly or biyearly Pro and Pro+ subscription.
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