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The Artificial Intelligence boom is just getting started.
That’s why Nvidia, Google, Amazon and Microsoft are quietly investing billions in this hidden AI opportunity.
5 hidden stocks could see huge gains of 389% – 1,355%.
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Nvidia (NASDAQ: NVDA) released its earnings report yesterday.
The company reported strong earnings that beat expectations.
- Earnings Per Share: $1.05 vs. $1.01 estimate
- Revenue: $46.7 billion vs. $46.1 billion estimate
Nvidia continues to grow rapidly – with revenues +56% and EPS +54% for the quarter.
The company’s outlook was also bright.
Nvidia expects Q3 revenues of $54 billion – ahead of Wall Street estimates of $53.1 billion.
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Nvidia investors had two major concerns with the earnings report.
#1. AI datacenter sales shortfall
Nvidia’s data center segment saw sales of $41.1 billion. This was $200 million short of consensus estimates.
Investors wanted to see the data center chip sales ahead of expectations.
#2. China
Right now, Nvidia isn’t allowed to sell its semiconductor chips to China.
Nvidia is working with the Trump White House on a deal that would allow chip sales to China.
The deal would allow Nvidia to sell its less powerful H20 chip in China. The U.S. government would receive 15% of all revenue from Chinese chip sales.
If the company can finalize a deal with the Trump administration…
Nvidia’s CFO says that sales to China could be $2 – $5 billion in Q3.
Current financial guidance assumes zero sales to China.
China is a huge market opportunity for Nvidia.
“The China market, I’ve estimated to be about $50 billion of opportunity for us this year if we were able to address it with competitive products. And if it’s $50 billion this year, you would expect it to grow, say, 50% per year,” explained CEO Jensen Huang.
Wall Street consensus analyst estimates predict 30% growth for Nvidia next year.
IMO that seems far too conservative.
AI spending continues to grow at +50% annually. And Nvidia’s dominant position should allow it to grow sales by 40% – 50%.
My price target for Nvidia is moving up to $220 per share.
Wall Street analysts are also increasing their price targets:
- Morgan Stanley: $210 (was $206)
- JP Morgan: $215 (was $170)
- Argus: $220 (was $150)
- KeyBanc: $230 (was $215)
- BofA: $235 (was $220)
Nvidia stock initially fell 5% in after-hours trading on Wednesday. By Thursday morning – the stock trimmed those losses and was down less that 0.3%.
It looks like investors now realize that Nvidia’s results were actually solid. And the stock is erasing its after hour losses.
Nvidia is THE AI stock. And I’m confident that shares will hit a $5 trillion market value by the end of the year.
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Ian Wyatt