Mizuho said Nvidia's upcoming earnings report is the next big catalyst for AI stocks.
Demand for Nvidia's GPU chips remains strong despite potential delays of its Blackwell chip, according to the bank.
Mizuho raised Nvidia's price target to $132, representing potential upside of 26% from Thursday's close.
Nvidia stock is down nearly 20% over the past month, but there's big upside ahead for investors and its upcoming earnings report will be a major catalyst for AI stocks, according to Mizuho.
The bank said said in a note this week that investors should ignore the noise related to potential delays of Nvidia's next-generation Blackwell chip, arguing that it is still seeing relentless demand for its GPU chips.
Nvidia's capacity for its current generation H100 and H200 chips remains "tight", Mizuho said, and any delays for Blackwell won't impact demand but will simply delay revenue for the company by about two to three months.
"Demand remains unchanged," Mizuho managing director Vijay Rakesh said. "NVDA continues to lead the charge."
The bank increased its Nvidia price target to $132 from $127.50, representing potential upside of 26% from Thursday's close.
Perhaps most important is Nvidia's ability to raise prices on its next-generation chips, which should boost the average selling price of its AI-enabled GPUs, Rakesh said.
For Nvidia's Blackwell NVL72 GPU rack, the cost could be upwards of $3 million, while its GB200 superchips could cost somewhere between $50,000 and $70,000 each, according to Mizuho.
That would be a big jump from Nvidia's H100 chips, which cost around $40,000, and its H100/B100 GPU rack, which costs around $300,000 to $400,000, according to the bank.
Those big price increases should continue to be a tailwind for Nvidia into 2025 and beyond, with Mizuho raising its earnings estimates for Nvidia in 2026 and 2027 when the company releases its next-generation Rubin-based GPU chips.
By 2027, Mizuho expects Nvidia to generate nearly $200 billion in revenue, more than triple the $61 billion it generated in 2024.
"We continue to see NVDA as the winner in the AI GPU space, with AMD being the 2nd player," Rakesh said. "We would note NVDA reports earnings on August 28th, which we see as the next major catalyst for AI-related names."
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