Chip giant Nvidia (NASDAQ:NVDA) will release its Q1 Fiscal 2025 financial results on Wednesday, May 22. Wall Street analysts are upbeat about NVDA stock ahead of Q1. They expect the company to deliver solid financial numbers driven by artificial intelligence (AI), especially in its Data Center business.
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The data center infrastructure is rapidly transitioning to accelerated computing, driving a significant demand for Nvidia’s GPUs. Moreover, analysts expect this trend to be sustained in the upcoming quarters. According to the TipRanks Stock Analysis tool, “Bulls Say, Bears Say,” analysts bullish on NVDA believe Nvidia’s strong competitive position in AI could drive strong demand and pricing leverage for its Data Center GPUs.
With this background, let’s look at the Street’s forecast for Nvidia’s Q1.
NVDA’s Q1 Revenues to More than Triple
Analysts expect Nvidia to post revenue of $24.59 billion in the first quarter, compared to $7.19 billion in the prior-year quarter. This implies that NVDA’s Q1 revenues will more than triple year-over-year. Moreover, it also indicates a solid sequential improvement.
This notable jump in NVDA’s revenue will likely be driven by the solid momentum in the Data Center business, with solid demand for its Hopper GPU computing platform and InfiniBand end-to-end networking.
Thanks to stellar revenue growth and operating leverage, Nvidia’s bottom line could quintuple compared to the prior year. For instance, analysts expect NVDA to post earnings of $5.60 per share in Q1, up about 414% year-over-year.
Is Nvidia a Good Stock to Buy Right Now?
Nvidia stock has gained over 204% in one year. Despite this rally, analysts are upbeat about Nvidia stock ahead of the Q1 print. NVDA has a Strong Buy consensus rating, reflecting 40 Buys and two Hold recommendations.
However, NVDA stock has gained quite a lot. Thus, these analysts’ average price target on NVDA is $1,057.76, implying a limited upside potential of 11.60%.
Insights from Options Trading Activity
It’s worth noting that options traders are pricing in a +/- 8.75% move in NVDA stock on earnings, smaller than the previous quarter’s earnings-related move of 16.40%.
The anticipated move is determined by computing the at-the-money straddle of the options closest to the expiration after the earnings announcement.
Learn more about TipRanks’ Options tool here.
Bottom Line
Nvidia is poised to deliver strong first-quarter results, with AI-driven demand bolstering its sales and earnings growth. However, the recent rally in its stock suggests limited upside potential, reflected in analysts’ average price target. Moreover, the magnitude of the quarterly beat will determine the future direction of NVDA stock.
