Nvidia's Fiscal Third-Quarter Results

As Nvidia (NASDAQ: NVDA) prepares to unveil its fiscal third-quarter results on November 20, investors are urged to temper their expectations, despite the chip giant's impressive history of earnings surprises.

Cautious Outlook from Morgan Stanley

Morgan Stanley analyst Joseph Moore emphasizes a cautious outlook, highlighting that Nvidia's current conditions may limit its upside in the immediate future. 'We are back to fully supply constrained on new products, which could limit upside on the current quarter and outlook,' Moore stated. He noted that the industry faces significant supply constraints, particularly with their latest GPU offerings—the Blackwell and the H200 series.

Solid Quarter Predicted

Despite these constraints, Moore anticipates a solid quarter for Nvidia, projecting that revenue from Blackwell could reach between $5 billion and $6 billion—a figure that exceeds earlier estimates but falls slightly short of previous forecasts. His sentiments align with the company’s previous statements that the January quarter would again reflect robust revenues, but with a caveat of reduced visibility in the market. He also observed an increase in demand for Hopper GPUs, suggesting that while interest in the H100 is waning, the H200 is experiencing a surge in demand.

Revenue Guidance and Supply Limitations

Moore noted that Nvidia has a track record of exceeding its revenue guidance, generally outperforming projections by around $2 billion in prior quarters. Although the consensus expectation for January stands at $36.5 billion, Moore indicates that supply limitations could hinder Nvidia's ability to exceed that figure significantly.

Forecast Adjustments for Fiscal Year 2026

In light of current supply dynamics, he has slightly adjusted his forecasts for the fiscal year 2026, now estimating a revenue of $176.78 billion, alongside a commendable 73.8% non-GAAP gross margin and $4.03 non-GAAP EPS—an upgrade from earlier estimates. 'We view this as a transitional quarter, and thus not a significant catalyst for the stock, but we maintain an Overweight/Top Pick rating,' noted Moore, reinforcing confidence in Nvidia's longer-term trajectory with the anticipated Blackwell cycle expected to drive growth into the second half of this year.

Elevating Price Target

In line with this positive outlook, Moore has elevated his price target for Nvidia’s stock from $150 to $160, signaling an expected 10% growth over the next several months.

Strong Consensus on Wall Street

Nvidia enjoys a strong consensus on Wall Street, with analysts generally favoring the stock. Out of 41 recent analyst reviews, only three have suggested holding the stock, while the majority advocate for a buy, cementing Nvidia’s status as a Strong Buy. The average price target currently stands at $157.27, implying an 8% premium in the upcoming year.

Final Thoughts for Investors

As the excitement builds for Nvidia's earnings announcement, investors are left to ponder the implications of supply chain constraints and sustained demand in the tech space. For those tracking stock performance, now may be the time to closely monitor Nvidia’s upcoming financial results for potential investment opportunities. Stay tuned—this could be the moment that defines Nvidia’s next bold move in the semiconductor landscape!