Nvidia (NVDA, Financial) is expected to modestly beat earnings expectations when it reports fiscal Q4 results on February 26, according to Bank of America (BofA).
However, analysts caution that the company's first-quarter outlook could face challenges. BofA analysts point to three key concerns: the transition to Blackwell chips, a decline in Hopper chip demand, and ongoing restrictions in China. These factors could create some near-term pressure, even if the company delivers strong results for the previous quarter. While Nvidia's stock could see some volatility after earnings, BofA remains optimistic about its long-term potential.
The firm continues to back Nvidia as its top sector pick, emphasizing that it's not just a chipmaker but a full-fledged computing platform. A major advantage for Nvidia, according to BofA, is its ability to seamlessly integrate hardware and software, something that sets it apart in the fast-evolving AI market.
BofA believes Nvidia's valuation remains attractive, trading at 31x projected 2025 earnings and 24x for 2026—on the lower end of its historical 25x-56x price-to-earnings range. Looking ahead, analysts say Nvidia's upcoming GTC conference on March 17 could be a major catalyst. The company is expected to unveil its GB300 and Rubin chips and showcase expansion plans into robotics and quantum computing.
