Nvidia Results See Mixed Reception on Wall Street

Nvidia’s (NVDA) results and outlook elicited a mixed response from Wall Street analysts on Thursday, with some cheering the chip giant’s revenue forecast and others lamenting uncertainty around sales to China.

The poster child for the AI boom on Wednesday projected third-quarter revenue of $54 billion, plus or minus 2%. The forecast exceeded Wall Street’s official estimate of $53.8 billion, but by a narrower margin than many investors have come to expect. Nvidia issued its guidance as it posted better-than-estimated second-quarter results, although key data center revenue lagged forecasts.

Nvidia shares are down around 2% in early trading on Thursday, but have retraced larger after-hours declines following the results.

Morgan Stanley Ups Price Target to $210

Morgan Stanley raised its price target on the stock to $210 from $206 and kept its overweight call, saying Nvidia shares are “less expensive than other AI beneficiaries.” They said the “bar [set by Nvidia] continues to be high but the growth acceleration is clear.”

“For the stock to sell off slightly after hours on these types of numbers certainly indicates that sentiment has largely caught up to the growth potential, after fears of digestion just a few weeks ago,” they wrote. “But outside of China geopolitics, this is a very clean beat and raise quarter.”

Nvidia CFO Collette Kress said during the earnings call Wednesday that the company hasn’t restarted sales of its H20 chips in China yet while the company waits for the U.S. government to formalize its revenue-sharing agreement. Earlier this year, the Trump administration blocked Nvidia’s sale of its H20 chips, which the company tailored for the Chinese market, then this month struck a deal where Nvidia would give the government 15% of China chip revenues in exchange for resumed sales.

UBS Says Nvidia Results May Give Investors ‘Reassurance’ on Market Rally

UBS analysts said they were optimistic on the prospects the rally in the AI-driven bull market would continue after Nvidia’s results. “The overall strength of the July quarter results may offer some reassurance for investors after signs of stalling momentum for the large-cap tech rally,” UBS analysts wrote, adding that “the outlook for large-cap tech remains compelling.”

Several of Nvidia’s major Big Tech clients, including Microsoft (MSFT), Meta (META), Amazon (AMZN), and Google parent Alphabet (GOOGL), have committed to spending big on their AI capacity, and Nvidia said Wednesday that one customer spent more than $10 billion last quarter. Kress said late Wednesday that the chipmaker anticipates $3 trillion–4 trillion in AI infrastructure spending by the end of the decade.

China Still an ‘Overhang,’ Says HSBC

HSBC was less upbeat, however, saying Nvidia hasn’t delivered a “beat and raise” quarter since its second-quarter fiscal 2025 earnings last year. “We maintain our Hold rating as we expect the near-term supply inconsistency and China uncertainty to remain an overhang,” they wrote.

Even Morgan Stanley analysts noted that prospects for a resumption of China sales are unclear, and that uncertainties remain around the 15% revenue deal with the government and the need for Beijing to give the green light to resume chip sales. China accounted for 20% of Nvidia’s data center revenue at one point and “while it remains a large market, we simply don’t know how large it will be when it comes back, or if it comes back at all,” the analysts wrote.

UPDATE—This article has been updated with the latest share price information.