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Nvidia’s stock has dropped 13% in five days due to geopolitical risks and tech sector challenges. Despite this, analysts remain optimistic about upcoming earnings and future growth.
Market Outlook for Nvidia Stock
Geopolitical risk factors, Tesla’s rather muted earnings report, and a drop in YouTube ad revenue from Alphabet recently contributed to a dim outlook for tech stocks.
The mood has certainly impacted Nvidia stock. It has been down almost 13% in the past five days.
However, there is some positive news for the major GPU producer. Recent U.S. economic data showed the country’s second-quarter GDP increased by 2.8% against estimations of a 2% jump. Consumer spending also increased by 2.3% after slowing down to 1.5%.
This has provided much support to Nvidia which is set to release its earnings on August 28. With tech stocks posting results and the shadow of another US-China trade war looming, the company is expected to face serious headwinds.
According to the company’s latest update, guided revenue stood at $28 billion, with a 107% YoY growth. However, Morgan Stanley’s chief US equity strategist, Mike Wilson, believes that the stock is entering “the dangerous part of the story.”
Nvidia’s shares are 13% down from the peak on June 18. However, that doesn’t mean the share price will continue to go down.
If we look at 2022, Nvidia’s stock plunged by more than half as its sales declined by 20%, but those who bought it at that time relished a stellar 750% increase starting in 2023. Will there be further corrections? That depends on how serious the restrictions on chip companies get and Nvidia’s sales in China, which accounts for 17% of its total revenue.
According to recent reports, the company is trying to design new semiconductors that will comply with the new rules. The company is working with Inspur, a distribution partner in China, for their new chip, B20, which is an offshoot of B200. The shipments are expected to roll out in Q2 of 2025. The current H20 chip, which has now been banned for sale to China, is still on track to bring around $12 billion in revenue this year.
Is Nvidia Stock Forecast Bullish?
Apart from Nvidia trying to navigate the trade war restrictions, the company’s data center sales can also provide a further boost.
The much-touted Blackwell chip recently madethe news. Analysts expect high demand for this product. According to Nvidia’s official statement, it will provide generative AI capabilities on “trillion-parameter” large language models (LLMs) which will be 25x cheaper and also environmentally sustainable as compared to the Hopper architecture.
Moreover, reports from Taiwan Semiconductor reveal a strong demand from Nvidia further bolstering a case for strong sales.
What to Expect from Nvidia Earnings?
Analysts at Zacks Research are seeing improved earnings for Nvidia, as highlighted in their recent note for the clients. For their Q3 2025 earnings per share estimate, they see it growing to $0.63, while the full-year earnings projection stands at $2.53 per share.
Argus, meanwhile, raised its target for Nvidia from $110 to $150, giving it a “buy” rating.
JPMorgan also increased their estimate for the chip manufacturer from $85 to $115 with an “overweight” rating in May.
TD Cowen now sees the share price at $165 from the previous $140 target.
Marc Ostwald, Chief Economist at ADM ISI, spoke to Techopedia about the Nvidia stock prediction:
“For the time being, it should continue to post stellar growth. But expectations are high, and matching or beating them may not be enough, as has been evident with other tech sector companies. There will be a lot of focus on earnings and whether there is any mention of companies reining spending on AI, as some investors start to question ROI prospects. Still, the latter is probably more a risk for Q3 and Q4”.
Despite all the optimism, it is important to understand that there is no certainty when it comes to stocks, especially the tech ones. The framing and market sentiment regarding the company’s financial performance have been set really high. Any slight hiccup in its sales or EPS might result in a correction if not a sell-off.
