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The company’s earnings are likely to surprise to the upside, says the analyst.
Wall Street investment bank Evercore ISI (EVR) is pounding the table on Nvidia (NVDA) stock ahead of the chipmaker’s upcoming financial results on Feb. 26.
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Mark Lipacis, a top five-star rated analyst at Evercore says that concerns about demand for Nvidia’s microchips and processors in the wake of the DeepSeek launch are overdone and that the company is likely to surprise to the upside with its upcoming fourth-quarter 2024 print.
Lipacis has opened a “tactical outperform” call on NVDA stock ahead of the upcoming earnings and says he expects the mega-cap technology company to deliver “a positive report and outlook.” He currently has a Buy rating on Nvidia with a $190 price target, which is 41% higher than where shares currently trade.
Demand from Hyperscalers
The bullish call from Evercore comes after Lipacis spoke with senior artificial intelligence (AI) engineers at big hyperscale cloud providers. The analyst says that Nvidia’s chips and processors “remain the platform of choice for hyperscalers’ customers, and the robustness of its software ecosystem and breadth of its development community put it five to 10 years ahead of anything else in the market.”
NVDA stock took a hit on the emergence of DeepSeek, the Chinese AI app that showed it’s possible to train models more cheaply than previously thought. The DeepSeek breakthroughs sparked fears that customers wouldn’t need as many Nvidia chips, or that companies would opt for cheaper processors.
Lipacis says that’s just not the case, noting that Nvidia’s chips can handle both training and inferencing, and in a world where inferencing work becomes more important, Nvidia is likely to be the most efficient player. Nvidia’s stock has declined 7% over the last three months.
Is NVDA Stock a Buy?
Nvidia’s stock currently has a consensus Strong Buy rating among 41 Wall Street analysts. That rating is based on 38 Buy and three Hold recommendations assigned in the last three months. The average NVDA price target of $178.71 implies 32.87% upside from current levels.
Read more analyst ratings on NVDA stock