Could Nvidia change course in the fourth quarter?

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NVIDIA (NASDAQ: NVDA) the stock is down about 17.5% this year. Profit taking, valuation issues and a sell-off in growth stocks drove the decline.

While Nvidia reversed some of its gains, continued strength in business, particularly in the data center and gaming divisions, indicates that Nvidia could deliver stellar fourth quarter financial results and beat Street estimates, this which could push the stock up.

For context, Nvidia will announce its fourth quarter financials after the market closes on Wednesday.

What awaits us?

Hans Mosesmann of Rosenblatt Securities sees Nvidia beating consensus estimates in the fourth quarter on both revenue and earnings.

Mosesmann expects Nvidia’s fourth quarter to be “driven by strength across all end markets, with data center and gaming as highlights.” The analyst expects NVDA’s gaming revenue to grow low-single digit quarter-over-quarter, driven by higher laptop sales. Meanwhile, it expects single-digit revenue growth in the data center segment on a quarterly basis.

Additionally, automotive and professional viewing revenue are also expected to increase sequentially.

Mosesmann has an optimistic view of NVDA stock and considers it “a best-in-class AI game with multiple growth vectors on the horizon (Omniverse, next-gen networking/DPU adoption, autonomous driving S /W kicker, etc).”

Like Mosesmann, Susquehanna’s Christopher Rolland maintains a buy rating on Nvidia shares and expects the company to beat street estimates.

Rolland said, “We expect solid results and guidance from NVIDIA.” However, the analyst sees “signs of a potential deceleration from the searing results of 2021’s +60% YoY growth.”

The Taking of Wall Street

Most analysts remain bullish on NVDA stock due to its continued strength in activity. Additionally, TipRanks’ Stock Investor tool shows investors hoarding NVDA shares ahead of the Q4 print.

According to the data, 7.4% of analysts holding portfolios on TipRanks have increased their exposure to NVDA stocks over the past 30 days. Additionally, about 1.4% of those investors added Nvidia shares in the past seven days.

Due to the correction, NVDA’s stock price predictions on TipRanks show strong upside potential. Nvidia’s average price target of $355.68 implies upside potential of 46.6% from current levels. On TipRanks, Nvidia has a strong buy consensus rating based on 23 buy and 2 hold recommendations.

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