Nvidia's $78 billion sales outlook defies scale concerns

Investing.com -- Nvidia’s result last week challenges concerns that growth would slow under the weight of its own size.

The company posted better-than-expected results for the January quarter and forecast current-quarter revenue above market estimates, with first-quarter fiscal 2027 revenue guidance of $78 billion.

Robust fourth-quarter data center sales, both sequentially and year over year, was notable given Nvidia’s scale.

“We'd call out FQ1'27 sales guidance ($78B) in particular as being the highlight of the call, given we believe this outlook was well in excess of prior buy-side expectations,” Wedbush analysts said.

Day after Nvidia’s earnings, Wedbush raised its price target by $70 to $300.

The shares are valued at about 30 times its fiscal 2028 earnings estimate of $9.97 per share, plus $2.21 per share in net cash.

Supply chain commitments that rose to $95.2 billion from $50.3 billion in the prior quarter, giving Nvidia visibility into shipments through calendar 2027.

Wedbush said the company moved early to secure constrained components such as memory, creating an advantage it expects to persist at least through this year.

Networking revenue also continued to grow faster than GPUs, helped by higher NVLink content and broader adoption of Nvidia’s full-stack offerings, including switching products, particularly in new data centers beyond large cloud service providers.

United States has approved a limited number of H200 shipments to China, but China has not yet cleared imports of the product. The brokerage said Nvidia’s performance is more striking given it has not fully returned to the world’s second-largest market, leaving potential upside if shipments resume.

Wedbush said the results as a positive signal for TSMC, saying AI demand for advanced processes remains intact, and for the broader hardware and components complex tied to data center spending.

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