‘Load Up Ahead of Earnings Today,’ Says Loop Capital About Nvidia Stock

Ahead of Nvidia's earnings report, Loop Capital analyst Ananda Baruah reiterated a Buy rating with a $175 price target, anticipating a strong outlook driven by robust demand and a shift towards higher-priced Blackwell GPUs, forecasting materially stronger results than Street expectations for the second half of calendar year 2025. Baruah notes that ASPs for CY2025 have increased to around $33K from $26K six months ago, and expects demand for GPUs in CY2026 to exceed 8 million units, potentially boosted by demand from the Middle East and Elon Musk's xAI data center.

Analysis

Nvidia's upcoming earnings report is a critical market event, viewed as a bellwether for the AI sector. Loop Capital analyst Ananda Baruah projects a favorable outcome, anticipating Nvidia's April quarter results and July quarter guidance will be sufficiently strong to support the stock, citing robust underlying demand. Baruah suggests that Nvidia's sell-in revenue recognition model, where revenue is booked upon product sale to partners, is advantageous in the current supply-constrained environment, allowing for upfront revenue capture while partners are expected to quickly move inventory. A key element of this optimistic outlook is the significant shift in Nvidia's product mix towards its newer, higher-priced Blackwell GPUs, which has reportedly driven average selling prices (ASPs) for calendar year 2025 (fiscal 2026) to approximately $33,000, a substantial increase from $26,000 estimated six months prior for the same period. This transition is further evidenced by key generative AI server manufacturers like Supermicro and Hewlett Packard reportedly writing down their existing Hopper GPU inventory. Baruah forecasts that Blackwell GPUs will constitute the vast majority of units sold in CY2025/FY2026, a revision from earlier expectations of an equal Hopper-Blackwell split. Looking further, GPU demand is projected to exceed 8 million units in CY2026 (FY2027), up from over 6 million units anticipated for the current year. This forecast for CY2025 notably does not incorporate potential demand from over 1 million GPUs for Middle Eastern entities or another 1 million GPUs for Elon Musk's xAI data center. Consequently, Baruah maintains a Buy rating on NVDA with a $175 price target, implying a potential 29% upside. The broader Street consensus also reflects a Strong Buy rating, with an average price target of $164.21, suggesting a 21% premium.

Key Decisions for Investors

• Investors should consider the bullish arguments presented by Loop Capital, particularly the potential for sustained strong demand, upside from the Blackwell product cycle transition leading to higher ASPs, and the possibility that current Street estimates for CY2025/FY2026 are conservative.
• Closely monitor Nvidia's upcoming earnings release for confirmation of these trends, paying specific attention to management's commentary on Blackwell demand and production ramp, ASP trajectory, and any updates on large-scale GPU deployments that could further bolster future revenue.
• While the analyst outlook is positive, investors should remain cognizant of external factors such as potential tariffs or AI chip export restrictions to China, which could introduce volatility despite being downplayed in this specific analysis.