Nvidia shares rose during Friday's session, on track to break a string of weekly losses. The stock rose past a key level on Wednesday, aided by a robust outlook for artificial intelligence revenue from Oracle.
Meanwhile, Super Micro Computer said Thursday that it has started shipping two of Nvidia's advanced server systems in volume worldwide. Analysts at HSBC believe that's good news for Nvidia's revenue, according to a Barron's report.
Nvidia's advanced GB300 NVL72 sells at $3 million while the older GB200 NVL72 has a $2.6 million price tag. Is Nvidia stock a buy or sell now?
Nvidia stock was on course to notch its first weekly gain after four consecutive weekly declines.
this week, investors reacted to Oracle posting a 359% surge in its remaining performance obligation of $455 billion n its first fiscal quarter. Oracle's cloud business has been getting a boost from AI demand. Oracle did miss quarterly earnings and sales estimates but shares soared after the company's update.
On Thursday, D.A. Davidson analyst Gil Luria upgraded Nvidia from neutral to buy with a price target of $210, up from $195. Luria was among the few analysts who had been skeptical of Nvidia's growth outlook, Barron's reported. The analyst sees a growth trajectory stretching into the next year at least due to AI compute demand.
Nvidia rival Broadcom late last week said it received a massive order from a new client, amounting to more than $10 billion. Shares of Broadcom hit an all-time high on Friday, as the client order highlighted prospects for further AI industry growth. Broadcom makes application-specific integrated circuits that are seen as rivals to Nvidia's graphics processing units.
For Nvidia's dominant position in AI processors, KeyBanc analyst John Vinh does not think Nvidia's moat is at risk, according to Barron's. Vinh said Nvidia's CUDA software stack is a "significant barrier to entry" since developers are familiar with it and may be reluctant to try other hardware. The analyst kept an overweight rating with a price target of 230.
Citi analyst Atif Malik on Monday cut his price target for Nvidia to 200 from 210 while maintaining a buy rating. Malik said competition from Broadcom could result in a $12 billion sales loss for Nvidia,
Analysts Raise Their Price Targets, Remain Cautious On China
Ahead of Nvidia's report, William Blair analyst Sebastien Naji gave an outperform rating with a price target of $205. The analyst expected zero revenue from China for the second quarter, but had anticipated China would boost Nvidia's outlook.
Susquehanna analyst Christopher Rolland raised his price target for Nvidia to $210 from $180 while maintaining a positive rating. However, in his earnings preview note, the analyst was cautious about Nvidia's revenue from its H20 chips.
The Information recently reported that Nvidia had ordered component makers of its China chip to stop production. This comes after the Cyberspace Administration of China had asked Nvidia in July to explain if its chips could be tracked or shut down remotely.
Chief Executive Jensen Huang said the chips do not have such capabilities. Separately, the artificial intelligence chip giant may also be working on a new chip for China that may be more powerful than the H20, Reuters reported.
Nvidia Stock: Second-Quarter Results
Nvidia reported fiscal second-quarter earnings of $1.05 per share, topping the estimate of $1.01 per share. Sales of $46.74 billion beat views of $46.05 billion. The company reported zero sales from its China H20 chip and did not include H20 sales to China in its fiscal third-quarter revenue outlook of $54 billion.
Wall Street was expecting $53.43 billion. The company also announced a $60 billion buyback.
In May, the company took a $4.5 billion charge in its first quarter and warned of an $8 billion hit to sales for the second quarter, Reuters and others reported.
Meanwhile, Chinese e-commerce behemoth Alibaba has developed a new artificial intelligence chip that can carry out several in-house tasks, The Wall Street Journal and others reported.
Though the chip is more versatile than earlier versions Alibaba has made, it is still far less capable than Nvidia's advanced chips.
Nvidia's China Revenue Deal
Investors recently began reacting to Nvidia's deal that secured a license to sell its H20 AI chips in China, but, in exchange, the company will give 15% of its revenue from chip sales in China to the U.S. government.
Nvidia's revenue deal could invite scrutiny, according to Doug Jacobson, an international trade attorney at Jacobson Burton Kelley, Barron's reported. "We're far beyond uncharted waters. We're in an uncharted universe," Jacobson said, noting the State Department is able to charge export-license fees related to defense technology, but the fees are not based on earned revenue.
A fee arrangement such as Nvidia's may run counter to a statute at the Bureau of Industry and Security, an agency that manages export controls, Aiysha Hussain, a former BIS senior adviser, told Barron's. Advanced Micro Devices also struck a revenue agreement with the Trump administration.
Nvidia shares touched an all-time high of 184.48 in August after trade talks between the U.S. and China resumed. Treasury Secretary Scott Bessent said there were "the makings of a deal" with China.
Nvidia Stock: China Chip Gets Go Ahead
Nvidia placed an order for 300,000 H20 chips with Taiwan Semiconductor, adding to an existing inventory of 600,000-700,000 chips, Reuters reported in late July, citing unnamed sources. In 2024, Nvidia sold around 1 million H20 chips, the report said, citing research firm SemiAnalysis.
A $4 Trillion Market Cap
Shares of Nvidia jumped 17% in June, guiding the chipmaker to outpace Microsoft in market capitalization. The valuation race between the two tech titans had been close ever since Nvidia announced its first-quarter results on May 28.
In July, Nvidia became the first company to hit a $4 trillion market cap, overtaking tech titans Apple and Microsoft.
Discover Top Growth Stocks With IBD Leaderboard
In terms of its 12-month price performance, Nvidia has outperformed 88% of all other stocks in Investor's Business Daily's database.
Funds own 41% of Nvidia's outstanding shares, according to IBD MarketSurge. Going by its Accumulation/Distribution Rating of D+, it appears that funds are not currently accumulating the stock. The rating measures price and volume action over the last 13 weeks.
The AI chip behemoth has a top-level Earnings Per Share Rating of 99. Further, the stock's all-around strength, or Composite Rating, sits at 98.
Is Nvidia Stock A Buy?
Looking at chart signals and technical measures can help investors assess whether Nvidia stock is a buy or sell now.
Nvidia retook its 50-day moving average on Wednesday and remained above that level on Friday. Shares offer an entry at 184.47.
