Investors who hold a position in Nvidia (NVDA) should watch for signs of the artificial intelligence bubble popping. While Nvidia is the leader in the space, supplying the most advanced GPU chips needed to power machine learning, shareholders will review its earnings report this week.
Analysts expect Nvidia to report normalized earnings per share of $0.74 ($0.70 GAAP). Out of 47 analysts, the average revenue estimate is $33.03 billion. In the last 90 days, 30 analysts raised their EPS upward.
Jefferies analysts most recently lifted their price target for Nvidia shares. They set a $185 price target, up from $150. This upgrade depends on Nvidia reporting revenue of around $2 billion higher than previously estimated. Expect Blackwell production to increase, which would boost sales in the quarter. More importantly, Nvidia should earn at least $5 a share in 2025 on revenue of $200 billion at the low end.
Last week, semiconductor stocks in the AI space fell. Applied Materials (AMAT) lost 12%, Arista Networks (ANET) lost 6.5% and Broadcom dropped by 10.2%. Advanced Micro Devices (AMD) faded from the October rally that took the share price to nearly $180. The firm announced a 4% layoff, representing 1,000 employees. This signaled to the market that the firm needed to raise profit margins by cutting costs instead of growing sales more quickly. That story undermined AMD’s growth in the AI space.