Nvidia (NASDAQ:NVDA) stock’s phenomenal success has been built on a series of outstanding quarterly reports accompanied by exuberant outlooks. As the chip giant prepares to release its latest earnings on Wednesday, August 28, there’s little reason to believe it will stray from this winning formula.
This view is echoed by Oppenheimer’s Rick Schafer, a top-ranked analyst currently holding the 4th spot among thousands of Wall Street experts. Schafer anticipates “upside F2Q (July) results and F3Q (Oct.) outlook led by sustained CSP/enterprise AI demand.”
Looking at Nvidia’s various segments, led by the H100, Schafer expects the Data Center business – which now accounts for 87% of total revenue – to show an 8% sequential uptick and grow by 136% year-over-year. Looking ahead, FQ3 should include a contribution from the H200 GPU while the Blackwell ramp begins in F4Q (January quarter), with a “more robust ramp” to follow in F1Q25.
Gaming, once Nvidia’s flagship segment but now playing a secondary role and contributing 10% of revenues, is projected to show 6% quarter-over-quarter growth and a 13% increase y/y. Schafer highlights that channel inventory levels remain healthy and points out that Nvidia continues to dominate the high-end gaming desktop/notebook market with an RTX installed base of over 100 million users.
As for the automotive business, which currently accounts for just 1% of revenues, it is expected to post a 35% year-over-year growth. Additionally, the segment boasts a $14 billion pipeline and has secured approximately 80 design wins for the Orin and next-gen Thor platforms.
From an investment standpoint, while NVDA stock has already delivered significant returns, Schafer points out that it is trading at 29 times his CY26 estimate, compared to a five-year average of 36 times. Moreover, with its “best-in-group GM/OM profile,” Nvidia continues to stand out as “the purest scale play on AI proliferation.”
Summing up, Schafer reaffirms his Outperform (i.e., Buy) rating on NVDA shares, with a $150 price target, suggesting a potential upside of 16% from current levels. “We remain long-term buyers,” he emphasizes. (To watch Schafer’s track record, click here)
Nvidia also gets plenty of support from Schafer’s colleagues. With an additional 36 Buy recommendations outgunning 4 Holds, the consensus view is that NVDA is a Strong Buy. Going by the $144.17 average target, the stock has room for additional growth of 11.5% over the next year. (See Nvidia 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.
