Shares of Nvidia (NVDA) rose more than 4% on Tuesday after bullish comments from Wall Street analysts citing strong demand for chips ahead of Wednesday afternoon’s earnings report.
In a client note this week, Stifel (SF) analyst Ruben Roy raised his price target on Nvidia from $165 to $180, while William Stein of Truist Securities (TFC) 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 combine to deliver overall TAM [total addressable market, or revenue opportunity] of over $100 billion due in 2025 and a longer-term opportunity funnel that could approach $1 trillion,” Roy wrote.
Nvidia shares also rose on news that one of its customers, cloud provider Nebius Group (NBIS), is launching its first GPU cluster in the US, which will 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 of 35,000 Nvidia chips corresponds to approximately 4% of the volume of Hopper AI chips. Wall Street analysts expect Nvidia to ship 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 on a report from the Information about overheating problems with the Blackwell AI servers. Nvidia reportedly suffered design flaws in August related to the individual Blackwell chips themselves, prompting the company to delay production of the AI chips to the January quarter.
Nvidia has not confirmed any overheating issues with its Blackwell servers, and the company told Yahoo Finance on Monday: “The technical iterations are normal and expected.”
William Stein of Truist Securities said of the overheating issues reported this week: “Conversations with our industry contacts don’t exactly confirm this latest data point, but they do reflect the challenges in the supply chain around the production platform.”
Despite reported Blackwell issues, Dell Technologies (DELL) says it has already shipped its latest AI hardware product, the PowerEdge system, with Nvidia’s latest GB200 NVL72 systems.
“[C]comments from NVDA, partners and our industry contacts have been overwhelmingly positive,” Stein wrote in a letter to investors. He pointed to emerging demand for Nvidia chips in the robotics and “traditional” computing sectors, as well as from AI software developers.
