Nvidia Earnings Preview: Focus on Customer Concentration
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy NVDA?
Source: Fool
- Stock Performance: Nvidia's stock has surged 11-fold since the beginning of 2023, yet it currently trades 10% below its all-time high, indicating cautious market sentiment regarding its future growth prospects.
- Revenue Expectations: Total revenue for fiscal 2026 is projected to reach $213 billion, with nearly 90% derived from the data center segment, highlighting the robust demand for AI GPU sales that will continue to drive the company's performance.
- New Product Launch: The Rubin architecture GPUs are set to begin shipping in the second half of the year, expected to reduce the number of GPUs needed for training AI models by 75%, significantly lowering inference costs and potentially leading to substantial growth for the company in fiscal 2027.
- Customer Concentration Risk: In Q3 of fiscal 2026, 61% of Nvidia's $57 billion revenue came from just four major customers, indicating a significant increase in customer concentration, which poses a substantial risk to revenue should any of these customers reduce their spending.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for NVDA is 264.97 USD with a low forecast of 200.00 USD and a high forecast of 352.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 174.190
Low
200.00
Averages
264.97
High
352.00
Current: 174.190
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Revenue Expectations: Total revenue for fiscal 2026 is projected to reach $213 billion, with nearly 90% derived from the data center segment, highlighting the robust demand for AI GPU sales that will continue to drive the company's performance.
- New Product Launch: The Rubin architecture GPUs are set to begin shipping in the second half of the year, expected to reduce the number of GPUs needed for training AI models by 75%, significantly lowering inference costs and potentially leading to substantial growth for the company in fiscal 2027.
- Customer Concentration Risk: In Q3 of fiscal 2026, 61% of Nvidia's $57 billion revenue came from just four major customers, indicating a significant increase in customer concentration, which poses a substantial risk to revenue should any of these customers reduce their spending.
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