What Nvidia bulls are whispering about before its big earnings report

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What Nvidia bulls are whispering about before its big earnings report

The Street is sticking with Nvidia (NVDA) into its market-moving earnings report next week.

Despite china-based DeepSeek coming out to rock the super bullish AI thesis earlier this year, Wall Street still sees Nvidia cleaning up from the buildout of AI infrastructure globally. Aggressive 2025 capex assumptions by hyperscalers such as

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(AMZN) and Meta (META) shared during this earnings season underscore the point.

“Over the coming decades the investment [in AI] is happening,” Russell Investments CIO Kate El-Hillow tells me.

However, that’s not to say there aren’t signs of caution going into Nvidia’s earnings report.

Yahoo Finance data shows Nvidia’s first quarter earnings per share trend has drifted modestly lower over the past 30 days. The Street has also not pushed up its 2025 EPS estimates on Nvidia for more than 60 days.

Nvidia is also among the most cheaply valued AI stocks at the moment.

On a forward price to earnings (PE) multiple basis, Yahoo Finance data shows Nvidia trading at 32 times. Broadcom (AVGO) and Marvell Technology (MRVL) are valued at 35 times and 41 times, respectively. Arm Holdings (ARM) clocks in at 76 times.

“I would say I wouldn’t want to be Jensen [Nvidia CEO Jensen Huang] necessarily because wow, other people are working on the same things,”

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(MSFT) co-founder Bill Gates told me on Yahoo Finance’s Opening Bid podcast (listen in below).

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Here are the vibes on the Street a few days ahead of Nvidia’s earnings on February 26.

“Despite recent concerns over the long-term demand impact from DeepSeek’s lower cost approach, most of the hyperscalers have actually revised up 2025 capex by 4%-26% during the earnings season, supporting our thesis that overall AI GPU demand

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remains strong. Nevertheless, we are lowering our FY26 estimate for data center revenue by 11% to $209 billion on the back of lower NVL rack [Nvidia data center product] assumptions, but our FY26 data center revenue forecast still remains 14% above consensus of $184 billion. However, we believe there remains greater pressure for Nvidia to deliver stronger second half fiscal year momentum on the back of its B300/GB300 roadmap to see if there is potential room for further upside.”

Rating: Reiterated Overweight

Price Target: $190, up from $180

“While we do believe that manufacturing constraints are limiting shipments of GB200 NVL server racks, we believe this will be more than offset by the following: 1) given the lower initial manufacturing yields of GB200 NVL, we believe customers have been able to push out orders of GB200 and backfill with HGX-based B200 servers with x86 head nodes; 2) DeepSeek, as well as limited supply of Huawei’s Ascend AI ASIC [custom chip], has created a surge in demand for H20 GPUs from China CSPs; 3) we believe Nvidia’s customers, especially communications service providers, are financing its inventory at EMS providers, so effectively sell-in shipments from Nvidi to EMS are recognized as revenues. As such, we are raising estimates and our price target and believe Nvidia’s strong results should alleviate any concerns that DeepSeek could derail near-term AI capex intensity.”

Story Continues

“Big picture we believe that two to three year Street numbers remain low as our work with both customers and the Nvidia build ecosystem points [to] … Nvidia GPU reaching 10 million to 12 million as hyperscalers look to increase their percentage on non-CPU compute to 50% plus in coming years (from ~10% currently). Remember … for Nvidia the story is accelerated compute + Gen AI, which means it is facing two $1.0 trillion compute market opportunities ahead of it in coming years, each of which is just at the very start.”

“We expect a modest fourth quarter beat but the first quarter

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could face headwinds from Blackwell transition, Hopper declines and China restrictions,” BofA analyst Vivek Arya wrote in a note on Tuesday. “The stock could be volatile post results, but we expect positive momentum to resume as investors look forward to Nvidia’s leading new product pipeline (GB300, Rubin) and total addressable market expansion into robotics and quantum technologies at upcoming GTC conference (March 17).”

Rating: Reiterated Outperform

Price Target: $190, reiterated

“Nvidia remains the platform of choice for hyperscalers’ customers, the robustness of its software ecosystem and breadth of its development community put it 5 -10 years ahead of anything else in the market. AMD (AMD) and

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(AMZN) AWS ecosystems are a distant #2 and #3.”

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