NVIDIA (NVDA) stock rose more than 4% Tuesday following bullish ratings from Wall Street analysts citing strong demand for chips ahead of its scheduled earnings report Wednesday afternoon.
In a client note this week, Stifel (SF) analyst Ruben Roy raised his price target on Nvidia from $165 to $180, while that of Truist Securities (TFC) William Stein raised his price outlook from $148 to $167.
Roy cited « a diverse set of data points, » including continued high spending on AI infrastructure by hyperscalers and demand for Nvidia’s latest Blackwell AI chips.
“We believe NVDA is well positioned in markets that, combined, generate an overall TAM (total addressable market, or revenue opportunity) of over $100 billion through 2025 and a longer funnel of opportunity term that could approach $1 trillion,” Roy wrote.
Nvidia stock also rose following news that one of its customers, cloud provider Nebius Group (NCIS), launches its first GPU cluster in the United States, which use up to 35,000 Nvidia chips. A GPU cluster is a network of graphics processing units, or AI chips, with massive computing power used to train and run artificial intelligence software.
For reference, Nebius’ order for 35,000 Nvidia chips is equivalent to about 4% of Hopper AI chip volume. Wall Street analysts expect Nvidia to ship them in the October period, according to Bloomberg consensus data.
Nvidia declined to comment on the deal.
The rise in Nvidia shares comes a day after shares fell following a report from the Information about overheating problems with its Blackwell AI servers. Nvidia in August would have been manage design flaws related to the Blackwell chips themselves, prompting the company to push back the production ramp for AI chips to the January quarter.
Nvidia has not confirmed overheating issues with its Blackwell servers, and the company told Yahoo Finance on Monday: « Engineering iterations are normal and expected. »
William Stein of Truist Securities said of the overheating issues reported this week: « Conversations with our industry contacts do not precisely corroborate this latest data, but they reflect supply chain challenges around the production ramp . »
Despite the issues reported by Blackwell, Dell Technologies (DELL) said it has already delivered its latest AI hardware product, the PowerEdge system, with Nvidia’s latest GB200 NVL72 systems.
“Feedback from NVDA, our partners and our industry contacts has been overwhelmingly positive,” Stein wrote in a note to investors. He highlighted emerging demand for Nvidia chips in the robotics and “traditional” computing sectors, as well as from AI software developers.
