Wall Street Doubles Down On Nvidia Amid AI Stock Slump

Core Viewpoint - Wall Street analysts remain optimistic about Nvidia's potential to recover ahead of its upcoming earnings report, despite recent stock declines attributed to concerns over a bubble in AI investments [1][2]. Nvidia Stock Performance - Nvidia stock initially dropped but stabilized later in the morning, closing down 3.6% at $186.86 on Thursday [2]. - The stock has faced selling pressure alongside other AI chip stocks, raising concerns about inflated valuations in the sector [2]. Analyst Ratings and Price Targets - Wells Fargo analyst Aaron Rakers raised Nvidia's price target from $220 to $265, maintaining an overweight rating, and expects Nvidia to outperform consensus estimates in its fiscal third-quarter results [2][3]. - Morgan Stanley's Joseph Moore also increased his price target from $210 to $220, anticipating strong results driven by the production of Blackwell processors [5]. Earnings Expectations - Analysts project Nvidia to report adjusted earnings of $1.25 per share on sales of $54.8 billion for the quarter ending October 26, reflecting year-over-year growth of 55% in earnings and 56% in sales [4]. - Rakers highlighted the expectation for Nvidia to showcase strong AI momentum as the company enters a new phase of scaling [4]. Market Context - Nvidia is featured on multiple IBD lists, indicating its strong market position and investor interest [5].