Bank of America resets Nvidia stock forecast before earnings

Core Viewpoint - Nvidia's stock has experienced slight gains but remains under pressure due to growing skepticism about artificial intelligence and upcoming Q3 earnings release on November 19 [1] Group 1: Market Sentiment and Stock Performance - Nvidia's stock closed at $190.17, up 1.77%, which is approximately 8% lower than its peak of $207.04 on October 29 [1] - Hedge fund manager Michael Burry is shorting Nvidia, contributing to negative sentiment [2] - SoftBank Group sold all its Nvidia shares (32.1 million) worth $5.8 billion to invest in OpenAI, further impacting market perception [2] Group 2: Analyst Insights and Forecasts - Bank of America has raised its long-term sales estimates for Nvidia for fiscal years 2026, 2027, and 2028, indicating confidence in the company's future despite current skepticism [4] - Analysts have increased non-GAAP EPS estimates for Nvidia for fiscal years 2026, 2027, and 2028 by 3%, 12%, and 14% respectively, reflecting a positive outlook ahead of Q3 earnings [6] - The sales estimates for Nvidia have been revised upwards from $204.14 billion to $208.48 billion for 2026, from $271.62 billion to $300.19 billion for 2027, and from $343.59 billion to $383.95 billion for 2028 [6] Group 3: Competitive Position and Market Dynamics - Nvidia is recognized as the only merchant chip supplier with proven full-stack execution in large AI clusters, which is expected to enhance its competitive position [5] - Concerns regarding cloud capital expenditures are noted to be seasonal, with expectations of resolution in the new year as cloud customers provide their capital expenditure outlooks [5]