Nvidia (NASDAQ:NVDA) is expected to modestly beat earnings expectations when it reports fiscal Q4 results on February 26, according to Bank of America (BofA).
However, analysts caution that the company’s first-quarter outlook could face challenges. BofA analysts point to three key concerns: the transition to Blackwell chips, a decline in Hopper chip demand, and ongoing restrictions in China. These factors could create some near-term pressure, even if the company delivers strong results for the previous quarter. While Nvidia’s stock could see some volatility after earnings, BofA remains optimistic about its long-term potential.
The firm continues to back Nvidia as its top sector pick, emphasizing that it’s not just a chipmaker but a full-fledged computing platform. A major advantage for Nvidia, according to BofA, is its ability to seamlessly integrate hardware and software, something that sets it apart in the fast-evolving AI market.
BofA believes Nvidia’s valuation remains attractive, trading at 31x projected 2025 earnings and 24x for 2026on the lower end of its historical 25x-56x price-to-earnings range. Looking ahead, analysts say Nvidia’s upcoming GTC conference on March 17 could be a major catalyst. The company is expected to unveil its GB300 and Rubin chips and showcase expansion plans into robotics and quantum computing.
This article first appeared on GuruFocus.
