Nvidia is poised to deliver impressive fiscal third-quarter revenue, buoyed by a substantial backlog that signals robust demand, as highlighted by Truist Securities on Tuesday. The chip manufacturing leader is set to unveil its third-quarter results on Wednesday, with Truist projecting a remarkable 83% year-over-year revenue surge, reaching approximately $33.13 billion.
Additionally, the brokerage has increased its earnings forecast to $0.74 per share, up from the previous estimate of $0.73. Notably, Nvidia executed a 10-for-1 forward stock split in June. Recent feedback from Nvidia and its partners, along with insights from Truist’s industry sources, has been predominantly positive, according to analyst William Stein in a note shared with clients on Tuesday.
"While we expect insights on Blackwell to feature prominently as a revenue contributor in both the third and fourth quarters, any potential delays in Blackwell may be offset by Hopper, providing a safeguard for revenue," he explained. As a result of these insights, Truist has elevated its price target for Nvidia’s stock from $148 to $167, keeping a buy rating in place.
During Tuesday afternoon trading, Nvidia's shares rose by 3.6%, marking a substantial increase of roughly 193% year-to-date, reflecting the growing momentum in artificial intelligence. The Hopper graphics processing unit computing platform plays a key role in training large language models and generative AI applications.
"The demand for Hopper remains robust, and the anticipation for Blackwell is astounding," remarked Jensen Huang, Nvidia’s Chief Executive, during an earnings call in August, as outlined in a Capital IQ transcript. Blackwell is regarded as a next-generation AI architecture. However, the company is currently addressing overheating issues within its GB200 NVL72 systems and is collaborating with various stakeholders to optimize designs and configurations for better heat management, according to Truist, which referenced a recent report by The Information. Stein noted, "This highlights a Blackwell adjustment discussed during the second-quarter call.
While conversations with our industry contacts do not completely align with the latest findings, they suggest ongoing supply chain challenges related to production ramp-ups." On the earnings front, Truist also updated its fiscal 2025 earnings per share (EPS) outlook for Nvidia from $2.81 to $2.85, as well as its 2026 estimate, which has been raised from $3.69 to $4.18, due to heightened growth projections in the data center market.
Stein pointed out, "Feedback indicates that Nvidia possesses a considerable backlog, providing exceptional visibility into demand for 2025." Looking ahead, two critical factors will influence the company’s growth trajectory in compute and revenue expansion, according to the analyst. "Firstly, while prevailing demand and investor focus revolve around various LLMs, we foresee the emergence of two distinct demand catalysts: physical AI and data processing," Stein remarked.
"Secondly, alongside the ramp-up of the Grace CPU for data centers, we expect Nvidia to announce a client CPU in 2025, significantly broadening its total addressable market.".