"Expectations of Rise in Nvidia Stock!"

Evercore ISI analysts recommended that investors buy Nvidia stock ahead of the earnings report to be released this week. The analysts emphasized that strong demand, improving supply, and attractive valuations indicate that the market has undervalued Nvidia’s growth prospects.

The firm maintained its Outperform rating and reiterated a price target of 261 USD, advising to buy NVDA shares before the earnings call scheduled for after market close on November 19.

Evercore ISI expects Nvidia to deliver a “surprise” quarter. Surveys indicate that the availability of the GB200 and GB300 models has significantly increased, yet demand still exceeds supply.

Despite this year’s Nvidia rally, analysts noted that the stock is trading at a “30x NTM Price/Earnings ratio,” which is below the nine-year average of “35x” and the projected PEG ratio for 2026 of “0.55x,” significantly lower than the average Artificial Intelligence sector ratio of “1.4x.”

The firm's comparison of the current Artificial Intelligence spending cycle to the dot-com era is striking. Evercore ISI noted that companies in the 1990s spent on building dark fiber capacity, hoping that “internet demand would emerge.” For Nvidia, it is stated that “AI capacity is being built alongside demand.”

Amazon's statement that it “monetizes new capacity as soon as it is deployed” was also highlighted by the analysts. Cloud capital expenditures are a significant factor in this process. Evercore ISI forecasts that hyperscaler cloud capital expenditures will grow by “72%” by 2025, with the growth rate for 2024 set at “56%.”

The firm assessed the forecasts for Nvidia’s Blackwell and Rubin computing revenues, stating that the estimates are just “335 billion USD,” and that there could be meaningful growth with the reported “500 billion USD” pipelines indicated by Jensen Huang.

Addressing concerns regarding Nvidia’s increasing index effect, Evercore ISI pointed out that the combined personal computer and networking ecosystem of INTC, MSFT, DELL, and CSCO has reached a “14% weight” in the S&P 500, providing a historical precedent for similar expansion.