Nvidia (NASDAQ: NVDA) is drawing renewed attention from Wall Street as the chipmaker prepares to release its fiscal second-quarter results on August 26. BMO Capital Markets has reiterated its bullish stance, labeling the stock a “top pick” for investors seeking exposure to the global artificial intelligence (AI) buildout.
Analyst Harsh Kumar maintained an Outperform rating and a $340 price target on Nvidia, noting that the company’s AI systems are “fully booked for the next 12 months as demand exceeds supply.” That level of visibility suggests the growth story is underpinned by real customer demand rather than speculative enthusiasm around AI spending.
BMO’s confidence also extends to Nvidia’s next-generation Vera Rubin NVL72 system, which is expected to begin ramping in the second half of the year. The new platform could provide another growth catalyst as hyperscalers and other large enterprises continue expanding their AI infrastructure. Kumar believes AI remains in its “early innings,” with capital expenditures likely to rise for years as demand for AI tokens and computing capacity grows.
Despite Nvidia’s recent share price appreciation—up more than 30% from its year-to-date low—BMO argues the valuation is not stretched. The stock trades at roughly 18 times forward earnings, which Kumar calls “a discount” relative to expected revenue growth. He projects Nvidia could grow revenue by 84% in fiscal 2027 and another 50% the following year.
At around $216, Nvidia shares remain below their May peak of $236, and the stock has struggled to regain that level. However, the combination of robust growth prospects, massive AI infrastructure demand, and a valuation BMO considers compelling gives the bull case more substance than simply betting on another AI-driven rally.
Wall Street’s expectations for the upcoming earnings report are already high. Consensus estimates call for revenue of approximately $92.16 billion and adjusted earnings per share of $2.09, representing year-over-year growth of about 96% and 99%, respectively. The underlying strength reflects sustained demand for Nvidia’s AI chips, as cloud providers and major tech firms continue committing substantial capital to AI infrastructure.
Investors will also be watching for updates on Nvidia’s China business, especially after reports that H200 chips have reached the country but with restrictions on mainland use. Additionally, the company’s recent $105 billion OpenAI lease guarantee highlights its deepening involvement in AI infrastructure projects.
Nvidia also offers a small dividend yield of 0.46%, which adds to its appeal as a long-term holding. As the earnings date approaches, market participants will be looking for signs that the AI boom continues to translate into strong financial performance.
For context, Nvidia’s upcoming results come amid a broader chip rally, though the stock has lagged some peers. Analysts see up to 30% upside ahead of the report, and the company’s steady share price ahead of earnings suggests investors are cautiously optimistic.
With AI infrastructure spending showing no signs of slowing, Nvidia’s earnings will be a key test for the sector. The company’s ability to meet or exceed expectations could set the tone for chip stocks in the coming weeks.
This article is for informational purposes only and does not constitute financial advice.
