Nvidia (NVDA) is still AI’s star — even if it didn’t light up its latest earnings report.
The chipmaker’s blockbuster second quarter, which beat expectations on the top and bottom lines, didn’t quiet analysts’ concerns over slowing momentum, particularly in data center growth and exposure to the Chinese market.
Frank Lee, global head of tech hardware at HSBC, struck a cautious tone. “We see limited room for further earnings upside revision or share price catalyst in the near-term unless we have increasing clarity over upside in 2026 CSP capex expectations.”
The market for artificial intelligence GPUs has been ever-growing. Lee pointed to Jensen Huang’s comments about the top four hyperscalers totaling $600 billion in capital expenditures in 2026. Huang projected $3 trillion to $4 trillion in AI infrastructure spending by 2030.
But Lee warned that “Nvidia has not seen a significant beat and raise quarter since 2QFY25.” The firm maintained a Hold rating and a $200 price target.
Nvidia stock fell slightly on Thursday morning. It’s up 29% year to date, well ahead of the S&P 500’s (^GSPC) 10% gain.
Nvidia’s data center performance didn’t sit too well with some on the Street. The segment’s revenue reached $41.1 billion, compared to $26.2 billion in the previous year and slightly above consensus estimates of $41.3 billion, according to Bloomberg data. It had not sold H20 chips to China in the quarter and did not include potential sales in its guidance.
Ruben Roy of Stifel noted that, “DC [data center] revenue was lower than expected despite increasing 56% y/y and 5% q/q.” The firm reiterated its Buy rating and $212 price target.
Gil Luria of DA Davidson highlighted the slowdown more bluntly.
“Data center revenues saw the smallest sequential increase since F1Q24,” Luria wrote in a note. He said that China’s push to increase domestic chip production, coupled with its national security concerns, could indefinitely restrict Nvidia’s future sales within the country.
Luria raised his price target to $195 from $135 but kept a Neutral rating, citing “continued concern around the company’s ability to sell H20s into China.”
Huang fought back worries about Nvidia’s future. “We obviously had a record quarter without China, and we just guided another record quarter without China. … It’s incredible growth,” he told Yahoo Finance.
Nvidia reported earnings on Wednesday, Aug. 27.
Others on Wall Street agree Nvidia has more room to run.
Citi analyst Atif Malik maintained his Buy rating, lifting his price target to $210. He anticipates that Nvidia could see strong growth from H20 chip sales, potentially to the tune of $2 billion to $5 billion in Q3, if geopolitical issues fade.
Loop Capital’s Ananda Baruah is still bullish. The firm reiterated its Buy rating and $250 price target, citing the company’s long-term AI opportunity. Baruah noted that next quarter could be stronger, especially if Nvidia were to include H20 sales from China. “As such, IF this does ship, this alone could provide more than enough Oct Q revenue upside to serve as a stock catalyst,” he said.
Despite echoing caution regarding China, John Vinh of KeyBanc increased his fiscal third quarter guidance, projecting approximately $1 billion in China revenue and stronger shipments of Nvidia’s new Blackwell AI chips. The firm maintained an Overweight rating and raised its price target to $230.
JPMorgan’s Harlan Sur offered a broader view of Nvidia’s strength. “We believe NVIDIA continues to execute across all segments,” he said, pointing to solid demand in PC gaming, data center, automotive, and enterprise segments. He also expects the company’s data center “to grow strongly” as hyperscalers continue to drive GPU demand.
Francisco Velasquez is a Reporter at Yahoo Finance. He can be reached on LinkedIn and X, or via email at francisco.velasquez@yahooinc.com.
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