Nvidia (NASDAQ:NVDA) has set the bar so high that what would be considered absolutely fantastic earnings for most companies only elicits a shrug from Wall Street when delivered by the AI chip giant.
That was the case following the release of the company’s January quarter (FQ4) print, with shares tilting into the red after another beat-and-raise display.
In the quarter, revenue rose by 78% year-over-year to $39.33 billion, beating the Street’s forecast by $1.17 billion. Within that total, Datacenter revenue hit $35.6 billion (Street had $34.1 billion), amounting to 93% y/y growth. The results were driven by strong demand for Hopper-based platforms, with the H200 experiencing sequential growth. Additionally, Blackwell’s revenue reached $11 billion, significantly exceeding management’s earlier expectations of more than a few billion.
There’s no doubt that 93% growth is impressive, but nitpickers will point out that it represents a slowdown from the 112% growth notched in FQ3 and is well below the 400% climb seen in the year-ago period.
Meanwhile, adj. gross margins reached 73.5% for the quarter, meeting consensus expectations while adj. EPS of $0.89 beat the analysts’ call by $0.04.
As for the guide, as has become customary, Nvidia came good here too; In the April quarter, revenue is expected to reach $43 billion, plus or minus 2%, vs. the Street’s $42.05 billion forecast, while adj. gross margins are expected to be 71.0%, plus or minus 50 basis points. However, by the end of the year, the company is confident margins will recover to the mid-70s(%), with management reiterating that the main pressure on margins is due to the one-time transition to full-rack scale systems in NVL72.
Looking at the results, Cowen analyst Joshua Buchalter says the beat/raise was one that “investors have come to expect from NVIDIA, albeit more moderate than recent quarters.” And while concerns persist around the Blackwell ramp and fresh worries following the ‘DeepSeek Moment,’ Nvidia continues to do what it does best – make the “extraordinary look ordinary.”
A bearish takeaway for Buchalter was that the guide was “only” 2% above Street’s forecast as “sky-high expectations will likely persist on otherwise incredible top-line results.” Additionally, there will be “continued (and inevitable) questions of sustainability of this level of remarkable growth and demand.”
Still, Buchalter remains bullish, asserting that Nvidia is not just the leader in accelerated computing – it has built an undeniable technological moat. The company’s transformation from a GPU hardware giant to a full-scale accelerated computing hardware/software platform provider remains firmly intact.
To this end, Buchalter rates NVDA shares a Buy, backed by a $175 price target. Should the figure be met, investors will be pocketing returns of 46% a year from now. (To watch Buchalter’s track record, click here)
Most on the Street agree with that thesis. Based on a mix of 38 Buys and 3 Holds, the analyst consensus rates NVDA stock a Strong Buy. At $178.66, the average price target makes room for 12-month returns of 49%. (See NVDA stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.