Nvidia Q1 results preview: will stock blast past $1,000?

The high bar set by NVIDIA Corp (NASDAQ:NVDA) since its “shock and awe” results of a year ago means shares in the chip giant head into next Wednesday’s results priced for yet more stunning growth.

Following its run of knockout earnings, the Magnificent Seven stock has almost doubled in value this year and by more than 200% since that market-changing quarterly report last May.

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The recent upside has also been fuelled by the potential of its new and more powerful Blackwell platform, which is expected to unlock generative AI for more organisations.

The new architecture features six technologies for accelerated computing in data processing, engineering simulation, electronic design automation, computer-aided drug design, quantum computing and generative AI — all emerging industry opportunities for Nvidia.

Amazon Web Services, Dell Technologies Inc Ordinary Shares - Class C (NYSE:DELL), Google, Meta Platforms Inc Class A (NASDAQ:META), Microsoft Corp (NASDAQ:MSFT), OpenAI, Oracle Corp (NYSE:ORCL), Tesla Inc (NASDAQ:TSLA) and xAI are among those expected to adopt Blackwell.

UBS said shortly after the launch that Nvidia looked to be on the cusp of an entirely new wave of demand from global enterprises and sovereigns - with each sovereign potentially as big as a large US cloud customer.

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In the run-up to quarterly results on 22 May, the bank said it continued to see a further 21% upside for shares to a target price of $1,150. This is based on an unchanged valuation multiple of 28 times forecast 2025 earnings of $41.04 a share.

Source: TradingView. Past performance is not a guide to future performance.

The bank believes there’s scope for first-quarter revenues of $26 billion (£20.5 billion), up from the fourth-quarter’s record $22.1 billion, and to guide to $27-$28 billion in the current quarter. Both would be good enough to keep the stock biased higher, it added. 

UBS believes that concerns among some investors about a potential “air pocket” later this year due to the initial Blackwell shipment timing looked to be overblown.

Deutsche Bank also sees Nvidia continuing its trend of delivering healthy multi-billion-dollar beats/raises on still healthy demand for AI computing.

The bank said this week: “While on the margin some may be paring back orders ahead of the launch of Blackwell, we still expect aggregate demand trends to remain healthy.

“Overall, we remain impressed by Nvidia’s best-in-class technology roadmap and believe AI fervour by its customers is likely to be sustained, yielding yet another strong quarter/guide.”

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It pointed to the strong capital expenditure commentary of Meta Platforms and Microsoft, but said investors had been more discerning of AI-driven upside during the current earnings season.

That was shown by the response to last week’s results by ARM Holdings ADR (NASDAQ:ARM), which fell 8% in dealings after the release of strong figures for the fourth quarter and year to 31 March.

On Nvidia, Deutsche Bank views the shares as fully valued and has maintained its Hold rating heading into the first-quarter report.

Last May’s update was described by Morgan Stanley as a “shock and awe” quarter after the semiconductor industry’s largest increase to guidance for a single three-month period.

Data-centre revenues in the most recent quarter hit a record $18.4 billion, up 27% from the previous quarter and up 409% from a year ago. Gaming revenues of $2.9 billion were flat from the previous three months and up 56% from a year ago.