Nvidia is 'back in the driver's seat' after latest earnings, Daiwa says

Daiwa Capital Markets raised its price target on Nvidia to $165 from $115, reiterating an outperform rating based on strong Q1 results and robust AI inference demand from major players like Microsoft, OpenAI, and Google. Analyst Louis Miscioscia highlights multiple growth drivers and expects further details at the upcoming Paris GTC, emphasizing that AI's impact will surpass previous technological shifts. Despite a 6% gain in 2024 and headwinds from tariffs and competition, the firm anticipates gross margins returning to the mid-70s, with the Blackwell chip ramp proceeding well.

Analysis

Daiwa Capital Markets has significantly increased its price target for Nvidia (NVDA) to $165 per share from $115, maintaining an outperform rating, which suggests a potential 16% upside from Wednesday's closing price. This optimism, articulated by analyst Louis Miscioscia, stems from Nvidia's strong first-quarter results and multiple growth drivers, notably robust inference demand for its chips from key technology players including Microsoft, OpenAI, and Google. Miscioscia anticipates a rally phase driven by good quarterly growth and similar expectations for 2025, with CEO Jensen Huang indicating accelerating AI demand and new growth avenues, further details of which are expected at the upcoming Paris GTC. The analyst underscores AI as a transformative technology trend, surpassing previous innovations like the PC or internet. The ramp-up of Nvidia's Blackwell AI chip is reportedly progressing well, and gross margins are projected to recover to the mid-70s range later this year. Despite shares having gained approximately 6% in 2025 and facing headwinds from tariffs and emerging competition like DeepSeek, the broader analyst community remains largely bullish, with 59 out of 65 analysts covering NVDA rating it a buy or strong buy, and the average price target indicating nearly 23% upside.

Key Decisions for Investors

• Investors should consider the positive analyst outlook and strong fundamental drivers, such as escalating AI demand and the Blackwell chip cycle, which support potential further appreciation in Nvidia's stock.
• Monitor the upcoming Paris GTC for material announcements regarding Nvidia's growth trajectory and new market penetration, as highlighted by Daiwa Capital Markets.
• Closely track gross margin performance, the impact of tariffs, and the evolving competitive landscape, including entities like DeepSeek, as these factors could influence Nvidia's financial results and stock performance.