Wolfe on NVIDIA (NVDA): 'we think the pain trade for NVDA is higher'

Wolfe Research analyst Chris Caso reiterated an Outperform rating and $170.00 price target on NVIDIA (NASDAQ: NVDA).

The analyst comments "The report was favorable in that all of the investor concerns heading into the quarter have by now been addressed - rack production, China (now out of numbers) and AI diffusion (not being enforced). The most interesting discussion during our callback was about rack shipments, which suggests that rack shipments are now well ahead of NVDA's revenue run rate, indicating that ODMs did build some inventory, but it is now selling through strongly (we still have some work to do to clarify the details, however). Net, we think the consensus view had been to own this stock for 2H and CY26, but the concerns heading into the report caused some to wait out this report. With the concerns now addressed, the stock up and a bullish outlook for 2H, we think the pain trade for NVDA is higher. NVDA said the overall message they were seeking to deliver is that rack production was now strong, and product was flowing through to customers. But it also suggests that the rate of rack shipment to customers is ahead of NVDA's revenue run rate, and we would expect both to converge at some point. We have another follow-up with the company scheduled to clarify this further."

For an analyst ratings summary and ratings history on NVIDIA click here. For more ratings news on NVIDIA click here.

Shares of NVIDIA closed at $134.81 yesterday.

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