Nvidia's stock is closing in on a record. Why Wall Street sees big beats ahead.

By Emily Bary

Analysts say strong demand for the new Blackwell chip lineup positions Nvidia to deliver strong numbers next year

After Nvidia Corp.'s last earnings report, one quibble from Wall Street was that the company didn't beat forecasts by the same magnitude as it had in recent quarters.

But within the chip sector, Nvidia (NVDA) looks the most primed to deliver big beats moving forward, according to Cantor Fitzgerald analyst C.J. Muse. He and his team see Nvidia with "the best upside to consensus" among all the names they cover.

Crucial to the company's beat potential is the new Blackwell chip, which is expected to make noticeable contributions in the January quarter. Nvidia expects "several billion" dollars of revenue from the product line in the January quarter, and Wall Street estimates seem to be for about $4 billion.

Read: Yet another bullish call on Nvidia's stock? Don't ignore this one.

With Blackwell seeing "insane" demand, in the words of Chief Executive Jensen Huang, and Nvidia known for strong execution, the company could deliver upside to expectations, according to Muse. He thinks January-quarter revenue will be about $37 billion and April-quarter revenue will be about $41 billion - numbers that are both roughly $1 billion above consensus projections.

Blackwell "should drive upside to numbers and quell fears around any air pocket ahead of what we believe to be the company's biggest and baddest product cycle we've seen," he wrote.

With that backdrop, Nvidia is "by far and away our TOP PICK," Muse continued.

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Nvidia shares were up strongly again on Tuesday, ahead 3.8% in the session and on track for their fifth day in a row of gains. The stock is now 2.3% off its all-time closing high of $135.58, set on June 18.

Mizuho desk-based analyst Jordan Klein said long-only and hedge-fund investors have been coming around to Nvidia's stock setup moving into the start of calendar 2025. Blackwell could mean significantly larger beats and outlooks from Nvidia "due to demand way higher versus supply," he wrote.

Also fueling excitement on Tuesday, according to Klein, is recent commentary from Hon Hai Precision Industry Co. Ltd., a contract manufacturer of artificial-intelligence servers that also pointed to strong Blackwell demand in an interview with Bloomberg.

See also: Nvidia may have yet another advantage in AI - and this one is less appreciated

-Emily Bary

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10-08-24 1302ET

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