- NVIDIA will announce its latest quarterly earnings after the U.S. stock market closes on Wednesday Eastern Time. HSBC, in its preview report, expects its revenue to reach $81.1 billion, exceeding the company's guidance of $78 billion and market consensus.
- HSBC analysts maintain a buy rating and have raised NVIDIA's twelve-month target price from $295 to $325, indicating a potential upside of about 46% from the previous trading day's closing price.
- The bank also warns that, given the stock's significant underperformance compared to the semiconductor index this year, a single earnings beat may not be enough to boost the stock price, and the market urgently needs a new marginal catalyst.
Core Drivers of Data Center and AI Chips
According to HSBC's disclosed forecast model, strong growth in the data center business remains a key driver supporting NVIDIA's earnings momentum. The bank expects NVIDIA's first-quarter revenue to exceed management's previous guidance of $78 billion by 4% and Visible Alpha's market consensus by 3%. This optimistic estimate is primarily supported by the continued strong demand for high-end AI GPU chips globally. In an environment where capital expenditure by hyperscale cloud service providers remains high, NVIDIA continues to capture a large share of market gains in the first half of the year, thanks to its integrated software and hardware ecosystem, thereby driving its fundamental earnings beyond Wall Street's buy-side expectations.
Lagging Relative Performance and Valuation Reassessment
Despite the potential for continued earnings outperformance, NVIDIA's price movement in the capital market shows some degree of divergence. This year, the stock has gained about 19%, significantly lagging behind the Philadelphia Semiconductor Index's approximately 60% gain over the same period. As of now, the stock price is still about 6% below the all-time high of $236.54 set on May 14. HSBC points out that even if the company demonstrates classic outperformance and raises guidance in this earnings report, due to multiple consecutive quarters of outperformance already being partially priced in by the market, such consistently impressive earnings reports may not trigger a substantial upward revision of the valuation center.
Gap in New Catalysts and Divergence in Growth Momentum
Analysts point out that the momentum driving NVIDIA's next major stock price increase is facing a narrative shift. Over time, the marginal boost effect of the next-generation architecture on the market is gradually diminishing. HSBC's report indicates that the current industry focus is undergoing a structural shift, moving from the past focus on hyperscale cloud service providers' capital expenditure to broader new growth areas such as AI infrastructure. If NVIDIA cannot demonstrate new high-growth application scenarios beyond computing power chips, its marginal upside potential may face temporary constraints.
Option Pricing Logic Under Upgraded Forward Guidance
In the window period before the earnings release on Wednesday, the options market is deeply pricing NVIDIA's potential implied volatility. HSBC expects that NVIDIA will not only exceed expectations in the first quarter but also provide second-quarter revenue guidance of $91.1 billion, significantly higher than the market consensus of $85.6 billion. Analysts have raised their fiscal 2028 earnings per share forecast by 27% to $13.01, with the core variable being an increase in the advanced packaging configuration expectation on the wafer foundry side from 900,000 to 1.1 million wafers. However, if the final disclosed guidance fails to meet the high expectations of the buy-side market, a rapid decline in option premiums may cause short-term technical pressure on the stock price.
