Wall Street is gearing up for a monster earnings report from Nvidia tonight

Analysts are scrambling to increase their price targets for Nvidia ahead of its Q2 results, seemingly much more confident in the affirmation they’ll be getting on the longevity of the AI boom and Nvidia’s critical role in facilitating it. Usually they at least have the restraint until after Nvidia earnings blow them away.

Over the past month, the average price target for Nvidia among analysts polled by Bloomberg has increased by 7.7%, the fastest growth rate this year.

Even still, the chip designer arguably hasn’t gotten much credit for a recovery in its China business. Nvidia has talked a ton about the importance of accessing the Chinese AI market — especially after effectively getting locked out after export restrictions were enacted in mid-April.

The company has since regained the ability to send its H20 chips to the world’s second-largest economy in exchange for sending 15% of revenues generated from those sales to the US government.

Already, those forgone sales have caused full-year revenues to be $10.5 billion lower than they otherwise would have, per Nvidia’s management, but it doesn’t seem like the company is benefiting vis-à-vis the Street’s view from this Chinese shift yet.

The Takeaway

“We believe Nvidia earnings on deck is another positive catalyst for tech stocks that will further remind investors this is still only the bottom of the 2nd inning in the 9 inning game around building out the AI Revolution over the coming years to enterprises/consumers globally,” Wedbush Securities analyst Dan Ives wrote. “We continue to believe from our Asia field checks that demand to supply is 10:1 for Nvidia’s golden chips.”