Is NVIDIA Stock a Buy as It Bets on Robotics Ahead of its Earnings?

Key Insights:

• NVIDIA stock could jump after deepening its presence in the robotics industry.
• The company will publish its financial results on Wednesday.
• Analysts are highly upbeat about its stock towards its earnings.

NVIDIA stock is in an upbeat tone as investors react to its recent entry into the robotics industry. It has also risen as the market waits for the upcoming quarterly earnings that will affect the broader stock market.

NVDA stock price was trading at $180 on Tuesday, a few points below the all-time high of $184.30. It has jumped by 110% from its April lows, making it the largest company globally.

NVIDIA Stock Price Boosted by Robotics Bet

NVIDIA has become one of the most important companies by dominating key industries. Its chips are the most popular in top areas like artificial intelligence and gaming.

The company is now betting on the booming robotics industry. In a statement on Monday, the company unveiled the Jetson GX Thor, a new chip selling for $3,500.

This chip, which is internally known as the robot brain, will help users create robots. Analysts believe that the robotics industry has more room to grow, with Nvidia’s Jensen Huang noting that it is the biggest opportunity after the artificial intelligence industry.

The new robotics chips are based on the newest Blackwell model and have AI capabilities, enabling clients to build more advanced robots over time.

NVIDIA’s robotics chips, which are grouped in its automotive segment, are seeing strong revenue growth. In its recent quarter, the company said that the division’s revenue surged by 72% from the first quarter of last year.

Meanwhile, NVIDIA is also expected to dominate the quantum computing industry, which experts believe is coming. The company has already unveiled a team to work on chips that will power the sector over time.

Analysts are Upbeat on NVDA Before Earnings

Meanwhile, most Wall Street analysts are highly upbeat on the NVIDIA stock price ahead of its earnings. In a note on Monday, UBS said that it was maintaining its bullish view of the company and maintained a price target of $205, much higher than the current $180.

Other analysts from companies like Morgan Stanley and Bank of America are highly bullish on the stock and placed a target of $250, which would drive its market capitalization to over $6 trillion, higher than the current $4.3 trillion.

According to Yahoo Finance, the average estimate among 42 Wall Street analysts is that its quarterly revenue will be $46 billion, a 53% surge from what it made in the same quarter last year.

The earnings per share is expected to be $1.01, also much higher than the 68 cents it made in the second quarter of 2024.

Historically, NVIDIA has tended to publish earnings that are better than expected. As such, the results will likely show that its revenue rose to $48 billion and its EPS rose to $1.10

Still, NVIDIA stock faces substantial risks ahead. For example, its Chinese business continues to face headwinds as the trade war with the US escalates. Trump has also threatened to use export restrictions as a way to punish countries that don’t collaborate with the US.

The use of export restrictions could also push China to invest more and create chips that are more powerful than NVIDIA’s.

NVIDIA SharePrice Technical Analysis

Technicals suggest that the NVDA share price could be on the verge of a big breakout to $200 when it releases its financial results on Wednesday. It has formed a bullish flag pattern with a vertical line resembling a flagpole and a descending channel.

It has now moved to the upper side of this channel as expectations rise ahead of its financial results. A bullish breakout will likely see it cross its all-time high of $184 and move towards the resistance at $200.

However, a drop below the lower side of the flag’s channel at $170 will point to more downside for NVIDIA stock and also for the broader stock market.