Why Analysts Still See Nvidia as the Top Chip Stock to Buy for Q2 Earnings Season

Nvidia Corporation (NVDA), the famous Silicon Valley chipmaker powering much of today’s artificial intelligence (AI) infrastructure boom, has become one of Wall Street’s biggest market stars. The company has reinvented itself as the gold standard for AI computing, cementing its place at the center of the global semiconductor industry.

That leadership is the exact reason Wall Street continues to view Nvidia as the chip stock to beat heading into another earnings season. Oppenheimer recently named NVDA as its top chip stock heading into second-quarter earnings, arguing that the AI infrastructure buildout remains far from over.

Analyst Rick Schafer sees hyperscale cloud providers pouring hundreds of billions into AI data centers, while enterprise AI, sovereign AI initiatives, and next-generation cloud platforms continue to widen Nvidia’s runway. The analyst expects the company’s relentless product cadence – from Blackwell to Vera Rubin – to keep extending its technological lead, with future AI revenue opportunities still not fully reflected in estimates. 

Let's dig into some details to understand why Oppenheimer remains firmly in Nvidia’s camp heading into the Q2 earnings season.

About Nvidia Stock

Founded in 1993 and headquartered in Santa Clara, California, Nvidia has evolved from a gaming chip maker into the company at the heart of the AI revolution. Its graphics processing units now power everything from AI data centers and cloud computing to robotics, autonomous vehicles, and high-performance computing.

As demand for AI infrastructure has exploded, Nvidia has grown into one of the world’s most valuable companies, with a market capitalization of $5 trillion. Beyond AI, the company is investing in energy-efficient computing technologies and fostering a more diverse workforce, reinforcing its position as one of the most influential names shaping the future of technology.

Few stocks capture investor attention quite like NVDA. As AI enthusiasm rises, so does interest in the chip giant. Still, this year has proved that even market favorites can’t climb forever without pauses, with bouts of volatility reminding investors that every rally eventually needs time to cool.

That tug-of-war has played out repeatedly over the past year. The stock surged to a fresh all-time high of $236.54 on May 14 before giving back 14.5% from that peak as investors locked in profits. The pullback came amid a mix of cooling AI euphoria, concerns over the pace of hyperscaler spending, and rising competition across the semiconductor landscape.

Still, zoom out, and the bigger picture remains firmly intact. After delivering a staggering 14,429% return over the past decade, NVDA has naturally entered a more measured phase. The stock is still up 16.9% over the past year and 8.4% year-to-date (YTD), underscoring that demand for its AI accelerators remains robust as tech giants continue pouring billions into AI infrastructure.

Technically, the picture has cooled slightly. The 14-day RSI sits at 48.32, slipping below the neutral 50 mark and indicating that buying momentum has softened considerably from earlier overbought conditions. However, the stock is not in oversold territory either, suggesting sellers have not fully taken control.

Meanwhile, the MACD oscillator has flashed a fresh bullish crossover, with the MACD line moving above the signal line and the histogram turning positive. While that points to improving near-term momentum, the signal is still in its early stages rather than indicating an explosive breakout. In other words, NVDA appears to be catching its breath after a remarkable run, while the broader uptrend remains alive as investors look for the next catalyst, possibly Nvidia's upcoming Q2 earnings.

Despite its massive run, NVDA’s valuation looks far less stretched than it once did. The stock trades at 24.15 times forward adjusted price-to-earnings, below both the sector average and its own historical multiple, suggesting investors are paying a more reasonable price for its growth today. While its price-to-sales ratio of 12.77 times remains above many peers, the premium is easier to justify given Nvidia's industry-leading revenue growth and profit margins.

The company is also rewarding shareholders, raising its quarterly dividend from $0.01 to $0.25 per share, a dramatic increase that reflects both its robust cash generation and confidence in its long-term financial strength.

A Snapshot of Nvidia's Q1 Numbers

Nvidia's Q1 FY2027 report, released in May, left little doubt that the AI investment boom is still going strong. The company’s numbers comfortably topped Wall Street’s expectations, showing that demand for its AI chips remains exceptionally strong. Revenue grew 85% year-over-year (YOY) to $81.6 billion, while adjusted EPS jumped 140% annually to $1.87.

The company simplified its reporting structure, organizing its operations into two main platforms – Data Center and Edge Computing – to better reflect how AI is expanding well beyond traditional technology companies.

The Data Center business remained the biggest growth engine, with revenue soaring 92% YOY to $75.2 billion. The growth was fueled by continued spending from cloud providers, enterprises, governments, and industrial customers building AI infrastructure. Demand for Nvidia's latest Blackwell AI chips and networking products also stayed robust. Within the segment, hyperscale cloud customers generated $37.9 billion in revenue, a 115% YOY jump, while the company’s AI Cloud, Industrial, and Enterprise business grew 74% to $37.4 billion. The Edge Computing segment generated $6.4 billion in revenue, up 29%, supported mainly by healthy workstation demand despite a softer consumer PC market.

Also, Nvidia continued to mint cash. It ended the quarter with $80.6 billion in cash and investments and generated $48.6 billion in free cash flow. The company returned much of that to shareholders through $19.3 billion in share repurchases and $243 million in dividend payments.

Looking ahead, management expects Q2 2027 revenue of about $91 billion, plus or minus 2%, which implies roughly 12% sequential growth and approximately 95% YOY growth at the midpoint, underscoring confidence that AI demand remains firmly intact.

Meanwhile, analysts project fiscal Q2 2027 EPS to jump 103% YOY to $2.01. For fiscal year 2027, profit is anticipated to grow 92.8% annually to $8.81 per share, before rising by another 36.9% YOY increase in fiscal 2028 to $12.06 per share.

What Do Analysts Expect for Nvidia Stock?

Oppenheimer analyst Rick Schafer believes Nvidia remains the top semiconductor stock heading into the Q2 earnings season because the AI investment cycle continues to accelerate. In a recent note, Schafer said spending on AI infrastructure remains the industry’s biggest growth driver, with the top four hyperscale cloud providers expected to spend more than $710 billion in capital expenditures this year, almost double that of 2025, as they race to build out AI capacity.

Schafer also highlighted several long-term growth opportunities beyond hyperscalers. Oppenheimer estimates the sovereign AI market at $1.5 trillion, enterprise AI at $500 billion, while emerging NeoCloud providers further expand an overall $2 trillion cloud service provider AI total addressable market (TAM).

The analyst also believes Nvidia's rapid product cadence will help preserve its technology lead. He expects Blackwell Ultra (GB300) to remain the industry’s AI workhorse, while the Vera Rubin (VR200) rack-scale platform is still on track for a third-quarter launch, despite market speculation about delays. Oppenheimer projects over $1 trillion in cumulative revenue from the Blackwell and Rubin platforms between 2025 and 2027, which Schafer believes points to meaningful upside to current earnings estimates.

Further, he sees an additional opportunity in China’s AI GPU market, which Oppenheimer estimates at more than $50 billion. Since that market is largely absent from current forecasts due to U.S. export approval delays, Schafer believes any progress – such as reports of initial Nvidia H200 shipments to China – could provide incremental upside. Reflecting that optimism, Oppenheimer reiterated its “Outperform” rating on NVDA with a $265 price target.

Overall, analysts are upbeat about NVDA’s growth potential, giving the stock a consensus rating of “Strong Buy.” Of the 48 analysts covering the stock, 42 advise a “Strong Buy,” while three suggest “Moderate Buy,” two advise a “Hold,” and only one suggests a “Strong Sell.” 

The average analyst price target for NVDA is $302.96, indicating potential upside of 49.1%. The Street-high target price of $500 suggests that the stock could rally as much as 146.1% from here.