Bank of America Chimes in on Nvidia Stock Ahead of Earnings - TipRanks.com

As Nvidia prepares to release its fiscal first-quarter 2025 earnings, Bank of America analyst Vivek Arya maintains a positive outlook, labeling the stock a "top pick" and anticipating it to surpass Wall Street estimates. However, Arya warns that even if Nvidia meets bullish expectations, with projected sales of $26 billion and a gross margin peak of 77%, the stock could still face a negative reaction due to concerns over slowing growth and potential pricing pressure.

The analyst suggests that a modest earnings beat for FQ1, coupled with an optimistic guide for the second fiscal quarter, might still not suffice to boost investor confidence significantly. Arya rates Nvidia shares as a Buy with a $1,100 price target, indicating a potential 16% growth, reflecting broader support from the analyst community, which largely favors the stock with a Strong Buy consensus rating.

Based on the web search context, if Nvidia meets or exceeds the bullish expectations set for its upcoming earnings, the stock could react unfavorably. This is because investors have become accustomed to Nvidia exceeding expectations, and anything less than a blowout quarter and outlook has the potential to send shares tumbling. Additionally, bears might argue that a quarter-over-quarter sales growth deceleration to 'only' 7-8% in the July quarter outlook is below the mid-teens or better performance of the last few quarters, and that peaking and declining gross margins are a sign of pricing pressure, unfavorable mix, or slowing demand/easing supply. However, a positive outcome might occur if Nvidia reports a modest beat in the April quarter, followed by an optimistic guide for the July quarter calling for 10%+ growth and maintaining a favorable gross margin of 76-77%.