Nvidia (NASDAQ:NVDA) is ready to turn the page on the DeepSeek drama and shift focus to its next big catalyst. The AI chip giant is set to report its fiscal 2025 fourth-quarter and full-year results on Wednesday (Feb 26), a highly anticipated event that could shake up the stock.
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
Naturally, the focal point will be the Data Center (DC) segment, Nvidia’s main breadwinner which includes its all-conquering AI chips.
Oppenheimer’s Rick Schafer, an analyst ranked in 8th spot among the thousands of Street stock experts, thinks that while the supply-constrained Blackwell ramps, near-term demand for the H200 will possibly be “stronger than expected.”
The analyst expects DC revenue (which makes up 88% of the total haul) to climb by 81% vs. the same period last year, driven by strong demand for the H200 chip. FQ4 sales of the new Blackwell chips should be around $5 billion, with a “robust ramp” expected in FQ1. Looking ahead, Nvidia’s roadmap remains packed, with the B300 expected in late 2025, followed by the Rubin and Vera chips in 2026. Moreover, another powerful tailwind could be emerging, as Schafer highlights the growing impact of sovereign AI – where nations pour resources into their own AI infrastructure – now recognized as a “meaningful growth driver.”
Once Nvidia’s main revenue generator, Gaming (which now accounts for just 9% of total revenue) is expected to decline by 8% quarter-over-quarter but show a 5% year-over-year increase, with limited supply being a factor. The new 50-series gaming GPUs launched in January, with most retailers selling out quickly, yet over the coming months, supply is expected to improve.
Schafer anticipates that Automotive revenue (1% of total) will grow by 84% y/y, driven by strong demand for the Drive Orin platform in China’s EV market, where the company has secured over 80 design wins.
For gross margins (GM), Schafer expects a sequential drop of 1.5% to 73.5% as Blackwell production ramps up. In the near term, GM should stay in the low 70% range before recovering to 75% in the second half of the year.
All told, Schafer is full of praise for the AI chip king. “NVDA is the de facto AI accelerator provider offering a unique full rack-scale system,” the 5-star analyst said. “One of the best GM/OM profiles in the group and the purest scale play on AI proliferation, we see NVDA’s entrenched DC AI ecosystem core to genAI.”
“We remain long-term buyers,” Schafer goes on to say, reaffirming a bullish stance on NVDA with an Outperform (i.e., Buy) rating and a $175 price target. That projection signals a 26% upside from current levels. (To watch Schafer’s track record, click here)
There are plenty of other NVDA fans on Wall Street; based on 30 Buys vs. just 2 Holds, the analyst consensus rates NVDA stock as a Strong Buy. A year from now, shares are expected to deliver returns of ~34%, considering the average price target stands at $179.77. (See NVDA stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
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.
