How good is Nvidia's latest earnings report? If financial data such as Q1 revenue soaring 260% and profit rising sixfold is not intuitive enough, the overnight US stock situation explains everything:

At a time when the three major US stock indices fell sharply and the total market value fell by 500 billion US dollars, Nvidia's market capitalization surged by 230 billion US dollars, breaking 2.5 trillion US dollars for the first time, and the stock price closed up 9.3% to a record high.

Nvidia's stock price rose more than 10% during the intraday period

Nvidia's market capitalization surpassed $2.5 trillion for the first time

Overnight, Nvidia bucked the trend and excelled, and Wall Street agencies helped little. Within just one day of the AI seller's earnings report, the latest research reports released by major investment banks were dazzling.

On the one hand, HSBC is shouting “the market or underestimating Nvidia,” and on the other, Citibank is optimistic about Nvidia Blackwell's perfect transition and raised the target price again.

The specific analysis is that Wall Street's two key concerns: empty windows and sustainability, all of Nvidia's quarterly reports have been addressed.

Regarding the empty window period, as Blackwell enters production, some investors are worried that Nvidia may face a “gap period” in sales: some customers will choose to wait for Blackwell and abandon the purchase of Hopper. In response to this concern, Hwang In-hoon emphasized during the conference call that Blackwell can be “backwards compatible” with Hopper's architectural system. This means that customers don't need to “wait patiently” for Blackwell to ship, buy Hopper early and enjoy it early, and it will also be “silky” if they want to transition to Blackwell later.

What's more, the Blackwell chip itself is progressing at all. Q2 will be shipped, Q3 will gradually be released, and it is expected to bring in a large amount of revenue this year.

Regarding sustainability, HSBC pointed out in its latest analysis report that the company's management is also optimistic about future demand, and with the technical advantages of the NVL server architecture and GB200, growth in the 2026 fiscal year is also guaranteed. Data center revenue will reach 179 billion US dollars, 38% higher than the market forecast of 130 billion US dollars.

Notably, Morgan Stanley also expressed strong confidence in Nvidia's future business development prospects and profit performance.

Damo wrote in the latest research report “Nvidia maintains strong growth through product transformation”:

Views on Nvidia stock: We recognize the stock's performance this year, and apparently market expectations are also improving. Furthermore, the company's revenue increased by $2 billion each quarter. This expectation is based on the performance of exceeding expectations by $2 billion each quarter, and this expectation has already been factored into the stock price.

But the context is a bit different now. Major hyperscale cloud service providers are talking about spending expectations for 2025. Reasoning is still in its relatively early stages as a driver of growth. The $2 billion upside comes from products that will be phased out over the next 9 months and will move to Blackwell, which will take us back into the configuration phase. This provides durability to the company's story — and is expected to increase visibility before the end of the year.

Furthermore, the company's profit performance was so outstanding that compared to its AI semiconductor peers, which have seen negative revisions and significant stock price performance in the past 18 months, the profit ratio has hardly increased. Although the market is large enough for competitors to succeed or even gain a share, NVIDIA is still the standard bearer for multifaceted AI.

All of this keeps us optimistic about the opportunities, and as other computing stocks with AI exposure rise, NVIDIA actually becomes easier to rationalize.

In terms of our target price, our estimates rose sharply, but as the numbers grew larger in the overall data center spending context, we reduced our medium-term price-earnings ratio forecast from 44x to 40x (about 37 times non-GAAP, in line with history). This raised the target from $1,000 to $1,160. We're trying to keep our earnings per share model conservative, so considering the uncertainty in the second half of 2025, we recommend using a slightly higher multiple, but our focus remains on improving visibility until the end of this year.

In summary, Damo is optimistic about Nvidia's stock price prospects. The launch of the new product Blackwell and the increase in spending by major cloud service providers will continue to increase the company's profitability and dominance in the AI field, so it raised its target price from $1,000 to $1,160.