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Nvidia (NVDA) is scheduled to report results of its second fiscal quarter after the market close on Wednesday, August 23, with a conference call scheduled for 5:00 pm ET. What to watch for: 

'ROBUST' OUTLOOK: Wedbush reiterated an Outperform rating and $490 price target on Nvidia, saying it expects the company to exceed current Street and Wedbush targets and to offer a "robust" forward outlook. The questions, rather, are whether Nvidia's guidance can hit the higher end of data center expectations, and does it matter if it does, the firm tells investors in a research note. Wedbush added that it doesn't think Nvidia results and guidance need to hit the high end of expectations.

Earlier this week, HSBC raised the firm's price target on Nvidia to $780 from $600 and kept a Buy rating on the shares. Although market expectations have "clearly risen" for Nvidia and the overall artificial intelligence supply chain, bullish AI server momentum continued to surpass market expectations year-to-date, the analyst tells investors in a research note. The firm raised its fiscal 2024 and 2025 AI server assumptions and believes Nvidia's earnings upside potential is still not fully priced into the shares. Bullish AI server momentum should continue to surprise on upside, contends HSBC.

AI DEMAND: Last week, Oppenheimer raised the firm's price target on Nvidia to $500 from $420, keeping an Outperform rating on the shares ahead of the fiscal Q2 report on August 23. The company is benefiting from "broad, robust" artificial intelligence demand but supply is curbing growth, Oppenheimer tells investors in a research note. The firm also notes that Nvidia's platform is enabling the transition from legacy CPU compute to accelerated compute.

Rosenblatt also raised the firm's price target on Nvidia to $800 from $600, while maintaining a Buy rating on the shares ahead of the July quarter results on August 23. Rosenblatt expects a "beat and raise" print with the guidance being impacted by severe constraints on H100 Hopper platforms. The firm believes demand over the next several quarters will exceed supply by at least 50%. Unconstrained, Nvidia's earnings for 2024 would be in the high teens per share versus Rosenblatt's current $10.35 estimate. The firm further sees Nvidia's 2025 earnings power "well into" the $20s per share.

Reiterating a Strong Buy on the shares ahead of quarterly results, Raymond James upped the firm's price target on Nvidia to $500 from $450. While expectations "aren't exactly low" in the print, a more modest beat-and-raise relative to last quarter and talk of visibility extending into 2024 "should keep the stock going," Raymond James tells investors in a research note. The firm increased estimates, saying GPU demand is significantly outpacing supply on the artificial intelligence spending boom despite mixed cloud capex trends.

BEAT PREDICTED BY PIPER: Last week, Piper Sandler also raised the firm's price target on Nvidia to $500 from $450 and kept an Overweight rating on the shares, saying it expects Nvidia to "beat estimates across the board" for the July quarter as well as earnings and revenue expectations for the October guidance. The firm sees "several factors" that give it confidence for continued growth in the company's data center business. It believes estimates for Nvidia have an upward bias, given strong traction at large cloud players, potential traction in enterprise, as well as tailwinds from China.

NO COMPETITION IN AI: Baird sees another supercycle for Nvidia as its channel checks suggest no competition in AI enterprise for the medium term and sees Grace representing an incremental few billion revenue opportunity for the medium term. The firm also raised its price target on Nvidia to $570 from $475 with an Outperform rating on the shares.

HEALTHY DE-RISK: Wells Fargo sees the recent pullback in Nvidia as a healthy de-risk given a very high bar setup into Q2 results. The company's substantially higher second half of 2023 supply plus platform expansion/monetization keeps Wells long-term positive. The firm has an Overweight rating on the shares with a price target of $500, up from $450.

STAY THE COURSE: Last week, UBS upped the firm's price target on Nvidia to $540 from $475, while maintaining a Buy rating on the shares ahead of the earnings report on August 23. Expectations for the company's fiscal 2025 earnings "have risen substantially," but investors should "stay the course here" and remain bullish amid the recent pullback in the stock over the past month. The firm adds that demand will dictate Nvidia's long-term artificial intelligence revenue opportunity, while supply should be the primary determinant for its data center revenue at least through 2024. Nvidia is "quite literally serving as 'kingmaker' as a huge wave of capital and new financing vehicles are chasing new AI software and specialized cloud infrastructure models," UBS contends.

TOP PICK: Earlier this month, Morgan Stanley named Nvidia the firm's Top Pick heading into earnings, telling investors in a research note that it thinks the recent selloff is a good entry point, as despite supply constraints, Morgan Stanley still expects a meaningful beat and raise quarter. The implied $7.5B in quarterly data center revenue is trending to $15B+ over the next few quarters, the firm says. Morgan Stanley made no change to its Overweight rating or $500 price target.

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