Nvidia Stock Investors Just Got (More) Fantastic News from Wall Street

Nvidia (NASDAQ: NVDA) stock has rewarded shareholders since early 2023, racking up gains of 1,420% -- but it hasn't all been smooth sailing. The artificial intelligence (AI) chipmaker has tumbled 10% several times, and plummeted 37% on one occasion, shaking out fair-weather investors in the process.

After gains of that magnitude, investors are justifiably taking stock, particularly given the macroeconomic uncertainty and concerns about the state of AI. As if to address those questions, Wall Street analysts are weighing in, and their takes are unmistakably bullish ahead of Nvidia's fiscal 2027 first-quarter financial report after the market close on Wednesday.

Image source: Nvidia.

Price targets are rising

Just today, several Wall Street analysts have increased their expectations for the chipmaker, and their price targets are climbing ever higher.

Morgan Stanley analyst Joseph Moore raised his price target on Nvidia to $285 from $265, while maintaining a buy rating on the stock. That represents potential upside for investors of about 26% compared to Friday's closing price. The analyst said Nvidia remains one of the "top picks" in the semiconductor space, and he's "expecting continued upside to numbers and a bullish tone" from management about competition and the company's expanding gross margins.

He wasn't the only one. KeyBanc analyst John Vinh raised his price target on Nvidia to $300 from $275, and maintained an overweight (buy) rating on the stock. That represents potential upside of 33% compared to Friday's closing price. The analyst believes Nvidia will report strong sales of its Blackwell AI chips, rising to 200,000 from 150,000 in Q4, adding between $5 billion and $7 billion in incremental revenue. He also expects the initial read on Rubin sales to be positive.

These analysts are the latest to raise their price targets for Nvidia, a recurring theme in recent weeks.

Is the writing on the Wall (Street)?

Taking a step back provides a more holistic view. Analysts' consensus estimates call for revenue of $79.17 billion, or about 80% year-over-year growth, resulting in adjusted earnings per share (EPS) of $1.78, or 120% year-over-year growth.

Looking further ahead, Wall Street is forecasting that Nvidia will generate revenue of $372 billion in 2026 and $492 billion in 2027, for a total of $864 billion over the coming eight quarters.

While results of that magnitude would certainly be bullish, they could well be conservative. CEO Jensen Huang has a long track record of issuing conservative guidance, as evidenced by how often Nvidia beats expectations and raises guidance.

Yet in a recent interview, Huang said Nvidia has "high confidence, high confidence visibility of $1 trillion plus of Blackwell and Rubin, not anything else, just Blackwell and Rubin," by the end of 2027. I have gone on record saying that investors should pay heed to the chief executive's outlook, as it suggests investors are underestimating the company's opportunity.

Despite the ongoing, rapid increase in its expectations, Wall Street still lags Nvidia's long-term guidance. I would argue that investors ignore the company's forecast at their peril, as Wall Street's estimates -- despite upward revisions -- remain far too low.

If Huang's forecast is accurate and Nvidia's backlog delivers more than $1 trillion in sales over the next two years, Wall Street's estimates are way too low, and the stock could soar much higher.

Nvidia is selling for 27 times forward earnings and 20 times next year's expected earnings. That's a reasonable price to pay for a company that says it will deliver high double-digit revenue and profit growth for at least the next two years.

Danny Vena, CPA has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.