Nvidia (NVDA) stock rose greater than 4% on Tuesday following bullish notes from Wall Street analysts citing strong chip demand ahead of its earnings report set for Wednesday afternoon.
In a client note this week, Stifel (SF) analyst Ruben Roy raised his price goal on Nvidia to $180 from $165, while Truist Securities’ (TFC) William Stein raised his price outlook to $167 from $148.
Roy cited “a various set of knowledge points” including continued high spending on AI infrastructure by hyperscalers and demand for Nvidia’s latest Blackwell AI chips.
“We consider that NVDA is well positioned in markets that mix to yield an overall TAM [total addressable market, or revenue opportunity] of greater than $100 billion exiting 2025 and a longer-term opportunity funnel that would approach $1 trillion,” Roy wrote.
Nvidia stock also rose on news that considered one of its customers, cloud provider Nebius Group (NBIS), is launching its first GPU cluster within the US, which can use as much as 35,000 Nvidia chips. A GPU cluster is a network of graphics processing units, or AI chips, with massive compute power used to coach and run artificial intelligence software.
For reference, Nebius’ order of 35,000 Nvidia chips is akin to about 4% of the amount of Hopper AI chips Wall Street analysts expect Nvidia to have shipped within the October period, Bloomberg consensus data shows.
Nvidia declined to comment on the deal.
Nvidia stock’s climb comes a day after shares fell on a report by the Details about overheating issues with its Blackwell AI servers. Nvidia in August was reportedly coping with design flaws related to the person Blackwell chips themselves, which prompted the corporate to thrust back the AI chips’ production ramp to the January quarter.
Nvidia has not confirmed overheating issues with its Blackwell servers, and the corporate told Yahoo Finance Monday: “The engineering iterations are normal and expected.”
Truist Securities’ William Stein said of the overheating issues reported this week, “Conversations with our industry contacts don’t precisely corroborate this latest data point, but they do reflect supply chain challenges across the production ramp.”
Despite reported Blackwell issues, Dell Technologies (DELL) said it has already shipped its latest AI hardware product, the PowerEdge system, with Nvidia’s latest GB200 NVL72 systems.
“[C]ommentary from NVDA, partners, and our industry contacts feel overwhelmingly positive,” Stein wrote in a note to investors. He pointed to emerging demand for Nvidia chips within the robotics and “traditional” computing sectors in addition to that from AI software developers.