On Thursday, Deutsche Bank (ETR:DBKGn) updated its stance on NVIDIA Corporation (NASDAQ:NVDA), increasing the price target to $140 from the previous $115, while maintaining a Hold rating on the stock. The adjustment follows NVIDIA's recent financial performance, which surpassed expectations.
NVIDIA reported a significant beat on its third-quarter earnings and provided a forecast for the fourth quarter that, while slightly below some expectations, still indicates strong growth.
The company's advancement with its Blackwell product ramp is reportedly ahead of schedule, which is a positive development given the previous revenue target of "several billions" set for the fourth quarter and beyond. This progress also addresses prior concerns regarding power issues.
The technology giant also alleviated worries about potential gross margin pressures linked to Blackwell, projecting a return to approximately 75% gross margins in the second half of fiscal year 2026 (calendar year 2025). NVIDIA's performance in the Data Center sector has been robust, reinforcing its position as a leader in AI accelerators and widening its competitive edge with the Blackwell introduction.
As a result of these developments, Deutsche Bank has increased its pro forma earnings per share estimates for NVIDIA for calendar years 2025 and 2026 by an average of approximately 15%. The analyst noted NVIDIA's consistent execution and remarkable growth, which are reflected in its current share price.
In other recent news, NVIDIA Corporation has been the focus of several analysts' reports due to its robust financial performance and strategic position in the AI industry. The company's third fiscal quarter of 2025 saw a record-breaking total revenue of $35.1 billion, a 94% increase from the previous year, largely due to robust demand for AI infrastructure.
NVIDIA's outlook for the fourth quarter ending in January met expectations with a forecast of $37.5 billion in revenue. However, the company anticipates a temporary dip in gross margins due to the early ramp-up of their Blackwell architecture, which is expected to recover later in the year.
Several analysts' firms, including Morgan Stanley (NYSE:MS), Evercore ISI, BofA Securities, Barclays (LON:BARC), Jefferies, Wedbush Securities, and Truist Securities, have maintained positive ratings on NVIDIA and adjusted their price targets.
Morgan Stanley increased the stock's price target to $168, Evercore ISI nudged its price target up to $190, BofA Securities maintained its Buy rating and $190.00 price target, Barclays increased the price target to $160, Jefferies maintained a Buy rating with a price target of $185, Wedbush Securities raised its price target from $160 to $175, and Truist Securities increased its price target to $169.
These recent developments underscore NVIDIA's strong financial performance and strategic position within the rapidly expanding AI industry. The company has addressed investor concerns, particularly regarding the scaling of Large Language Models (LLMs), and reassured stakeholders about its production capabilities. NVIDIA's Blackwell production is in full swing, with January quarter shipments expected to surpass previous forecasts.
InvestingPro Insights
NVIDIA's recent performance and Deutsche Bank's updated outlook align with several key metrics and insights from InvestingPro. The company's market capitalization stands at an impressive $3.57 trillion, reflecting its dominant position in the semiconductor industry. NVIDIA's revenue growth is particularly noteworthy, with a staggering 194.69% increase over the last twelve months, supporting Deutsche Bank's observations about the company's strong performance.
InvestingPro Tips highlight NVIDIA's financial strength and market position. The company has maintained dividend payments for 13 consecutive years, demonstrating financial stability. Additionally, NVIDIA is trading near its 52-week high, which corroborates Deutsche Bank's increased price target and the overall positive sentiment surrounding the stock.
The company's gross profit margin of 75.98% aligns with Deutsche Bank's projection of a return to approximately 75% gross margins in the latter half of fiscal year 2026. This robust profitability, coupled with NVIDIA's impressive operating income margin of 61.87%, underscores the company's efficiency in converting revenue into profit.
For investors seeking more comprehensive analysis, InvestingPro offers 22 additional tips for NVIDIA, providing a deeper understanding of the company's financial health and market position.
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