Chipmaker Nvidia is one week away from sharing its second-quarter earnings, but the consensus is that the numbers will outperform estimates by Wall Street analysts. This caused the company’s shares to climb more than 8%.
Nvidia is expected to benefit from increased demands for their chips that were caused by the Artificial Intelligence race. Both high-profile companies and smaller developers are relying on Nvidia chips to power their AI platforms.
In the first quarter, Nvidia blew past analysts’ expectations, reporting $7.2 billion in revenue compared to an estimated $6.5 billion. It also raised its forecast for Q2, saying it expects revenue of $11 billion, while analysts predicted $7.3 billion.
The same outcome is expected in Q2, considering that the company was able to increase its margins thanks to the high demand.
“I anticipate that the results are going to look really outstanding because demand is so high, and that means Nvidia is able to command even higher margins than it would otherwise,” Forrester analyst Glenn O’Donnell told Yahoo Finance.
Most analysts raised the target price for Nvidia’s stock in recent days. UBS analysts have now set the target price from $475 to $540, while Baird’s analysts went even further, increasing the target price to $570 compared to the previous $475.
Nvidia’s stock opened at $404.98 per share on Monday morning but has climbed all the way to $439.04 through Wednesday. The company’s shares are 206.70% up year-to-date.