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Nvidia technology in a server room.Key Takeaways
As investors wait for Nvidia to report its fiscal second-quarter results, Raymond James analysts said they expect a strong quarter.
They reported industry checks suggest no slowdown in artificial intelligence (AI) infrastructure demand and highlighted Nvidia's prime position to gain in the AI era.
The analysts said they expect a reported delay in Nvidia's Blackwell chip to have a "modest" impact in the third quarter, though it could be partially offset by heightened demand for Hopper, Blackwell's predecessor.
As anticipation of Nvidia's (NVDA) upcoming earnings report builds, Raymond James analysts said they expect a solid quarter on demand for its artificial intelligence (AI) chips.
"We are looking for another strong quarter from NVDA despite the noise surrounding Blackwell delays," the analysts said, reiterating a "strong buy" rating for the stock.
Reported delays in the Blackwell chip sent Nvidia's stock price tumbling earlier this month, though the chipmaker has said production is on track to ramp in the second half of the year, as planned. Investors are likely to be watching for indicators of the delay's impact in the upcoming earnings report due for release on Aug. 28.
Blackwell Delay Could Have 'Modest' Impact
The analysts said they anticipate a "modest" contribution from Blackwell in the fiscal third quarter and that delays could drive sales of Hopper, the Blackwell chip's predecessor, in the near term.
They suggest that "a longer delay could increase the risk of a customer spending pause," but added that they "have no reason to doubt" Nvidia's capability to ship Blackwell by the end of the year.
Raymond James analysts were not alone, as other analysts have indicated worries about the impact of delays may be overblown.
No Indications of AI Demand Slowdown
The analysts said their checks with hyperscale customers and supply chain partners suggest no slowdown in demand as big tech companies ramp up spending on AI infrastructure, supporting Nvidia's data center sales.
The analysts highlighted that Nvidia beat revenue and outlook expectations in its past four earnings reports. While Nvidia has historically outperformed analysts' projections, the market's expectations around the AI darlings' performance have grown, setting an increasingly higher bar for the chipmaker.
Nvidia shares closed about 1% higher at $128.50 Wednesday. The stock has more than doubled in value since the start of the year.
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