Stock Analysis

Forecast: Analysts Think NVIDIA Corporation's (NASDAQ:NVDA) Business Prospects Have Improved Drastically

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NVIDIA Corporation (NASDAQ:NVDA) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects. The market seems to be pricing in some improvement in the business too, with the stock up 8.9% over the past week, closing at US$472. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

Following the upgrade, the current consensus from NVIDIA's 51 analysts is for revenues of US$54b in 2024 which - if met - would reflect a substantial 66% increase on its sales over the past 12 months. Per-share earnings are expected to jump 131% to US$9.63. Before this latest update, the analysts had been forecasting revenues of US$44b and earnings per share (EPS) of US$6.62 in 2024. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

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NasdaqGS:NVDA Earnings and Revenue Growth August 25th 2023

It will come as no surprise to learn that the analysts have increased their price target for NVIDIA 19% to US$620 on the back of these upgrades.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that NVIDIA's rate of growth is expected to accelerate meaningfully, with the forecast 175% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 25% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that NVIDIA is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, NVIDIA could be worth investigating further.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for NVIDIA going out to 2026, and you can see them free on our platform here..

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

What are the risks and opportunities for NVIDIA?

NVIDIA Corporation provides graphics, and compute and networking solutions in the United States, Taiwan, China, and internationally.

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  • Earnings are forecast to grow 30.99% per year

  • Earnings grew by 33.1% over the past year


  • Significant insider selling over the past 3 months

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