Chip giant Nvidia (NASDAQ:NVDA) will report its financial results for the fourth quarter of fiscal 2024 on February 21. Wall Street analysts are bullish on NVDA, expecting the company to deliver solid financials due to artificial intelligence (AI)-driven demand, particularly in the data center business.
It's worth noting that most analysts raised their price targets on NVDA stock ahead of the Q4 release. One analyst, Vijay Rakesh of Mizuho Securities, continues to see Nvidia as “the best AI/ML (machine learning) company.” In a note to investors on Feb. 12, Rakesh said near-term demand for the company's chips is outstripping supply, suggesting strong sales in the coming quarter. The analyst increased NVDA's revenue growth estimates for fiscal 2025 and 2026. Additionally, he increased the price target to $825 from $625.
NVDA's fourth-quarter revenue more than tripled
Wall Street analysts expect Nvidia to post fourth-quarter revenue of $20.37 billion, compared to $6.05 billion in the same quarter last year. This means NVDA revenue will more than triple year-over-year in the fourth quarter.
This massive revenue growth of the company is likely due to the continued momentum in the data center business. Continued expansion of the NVIDIA HGX platform, which is the reference architecture for AI supercomputers and data center infrastructure, is likely to increase the company's revenue and overall data center revenue.
Thanks to higher sales and operating leverage, Nvidia's profit could also see a significant increase in the fourth quarter. Analysts expect NVDA to report fourth-quarter earnings of $4.59 per share, up about 422% from a year ago.
Is Nvidia a good stock to buy right now?
According to analysts' consensus rating, Nvidia is a Buy ahead of its fourth-quarter earnings release. NVDA stock has 37 Buys and three Hold points for a Strong Buy consensus rating. However, with NVDA stock up about 47% year-to-date and up about 252% in a year, analysts' average price target of $746.91 implies a limited upside of 2.86%.
Susquehanna analyst Christopher Rolland commented on the limited upside potential, saying investors have already priced in much of the potential near-term gains. He expects NVDA to post solid fourth-quarter earnings and believes the magnitude of the hit will determine NVDA stock's future performance. Rolland reiterated his Buy rating on NVDA stock on February 14 and increased the price target to $850 from $625.
Insights from options trading activity
It's worth noting that options traders are pricing in an EPS move of +/- 11.14% for NVDA stock, which is larger than the previous quarter's EPS move of -2.46%.
The expected move is determined by calculating the at-the-money straddles of the options closest to the expiration date following the earnings announcement.
Learn more about TipRanks' options tool here.
Bottom line
Nvidia is poised to deliver strong fourth-quarter results, with AI-driven demand in its data center business supporting its sales and earnings. However, the recent rally in its shares suggests that the positive aspects are already reflected in the current market price.
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