Here's the trade on Nvidia ahead of earnings, according to analysts

Published Sun, Aug 20 20238:11 AM EDT

Wall Street isn't taperig down expectations for Nvidia heading into second-quarter results. The company emerged as the premier artificial intelligence stock after reporting exceptional first-quarter results that also saw shares climb to a $1 trillion market capitalization . Now, Nvidia is up 196% this year. NVDA YTD mountain NVDA has surged in 2023 Ahead of earnings Wednesday, analysts are weighing in on the forthcoming report and how to trade the earnings. Rosenblatt Securities analyst Hans Mosesmann raised his price target last week to $800 per share , implying upside of 84% over the next 12 months. He added that he expects a top and bottom line beat for the second quarter. "NVDA remains one of our top plays as the company stands in a league of its own when it comes to software and AI solutions. With unmatched strengths in compilers, libraries, and vertical optimizations," Mosesmann said. "NVDA's competitive moat and growth prospects are not fully reflected at current levels." Oppenheimer's Rick Schafer maintained an outperform rating on Nvidia and raised his price target to $500 per share up from $420. "Nvidia has transformed from a graphics company to a premier leading AI computing platform company," Schafer said. "We see several structural tailwinds driving sustained outsized topline growth in high performance gaming, datacenter/AI and autonomous driving vehicles." Wolfe Research analyst Chris Caso initiated coverage of Nvidia stock in a July 19 note with an outperform rating coupled with a $570 per share price target. "The main question is whether there is still room for the stock to move further, given the big move and elevated valuation - we think there is given NVDA's strong FCF [free cash flow]," Caso said. "We think it's unprecedented to have a company growing this fast (30% 8-year CAGR [compounded annual growth rate], 35% 3-year CAGR), and still throw off this much cash (~2.2% FCF yield even after > 200% YTD stock gain)." Elsewhere, Citi analyst Atif Malik reiterated both a buy rating and a $520 per share price target in a note last week. The analyst said he expects $11 billion in revenue against Wall Street's $11.14 billion. "We model ~$11B/$12B or in-line Jul/Oct sales and believe buy side expectations have gone up or ~$12B/$14B since last earnings report," Malik said. However, Deutsche Bank analyst Ross Seymour is more cautious on Nvidia stock heading into earnings, and reiterated a hold rating in Tuesday note. Seymour maintains a $440 per share price target, which forecasts roughly 2% upside from the stocks current trading levels. Seymour noted, however, that the risk remains skewed to the upside. "The most important metric for NVDA's LT [long-term] thesis will be the magnitude/slope of future growth (with this nearly un-capped upside potential strongly deterring bears), but also the risk of cyclicality should near-term demand not prove sustainable," Seymour said. — CNBC's Michael Bloom contributed to this report.