As Trump Backs 'Drill Baby, Drill,' His DOGE Co-Lead Elon Musk Believes 'All Energy Generation Will Be Solar' — Here's What UBS Recommends After Election Dip

NVIDIA Corp. continues to dominate the artificial intelligence landscape, with CNBC’s Jim Cramer and Wall Street analysts reinforcing their bullish outlook following the company’s stellar third-quarter earnings report.

What Happened: “The demand is accelerating because the payoff is so great,” Cramer said on Thursday, citing CEO Jensen Huang‘s assertion that customers earn five dollars for every dollar invested in Nvidia chips.

This compelling return on investment, Cramer argues, makes Nvidia’s products essential for major tech companies. “That means they have no choice but to buy Nvidia's chips,” he said.

The sentiment is echoed by Wedbush‘s Dan Ives, who called the results a “jaw-dropper.” Ives predicts the Nasdaq could surge to 25,000, driven by an extraordinary multiplier effect where “one dollar spent on GPU chips translates to an $8 to $10 impact across the tech sector.”

See Also: Bitcoin Analyst Warns Of ‘4-6 Flash Crashes’ Before Year-End As It Inches Closer To $100K

Why It Matters: Nvidia reported third-quarter revenue of $35.1 billion, up 94% year-over-year, with Data Center revenue alone reaching $30.8 billion. The company’s CFO Colette Kress projects gross margins will temporarily dip to the low 70% range as the new Blackwell systems ramp up production.

Rosenblatt analyst Hans Mosesmann maintained a Buy rating while raising the price target from $200 to $220.

This optimism is reflected in a recent Benzinga poll, where 48% of respondents believed Nvidia would continue to dominate the “Magnificent Seven” stocks in 2025, followed by Tesla Inc. at 27%.

Huang describes this period as “the beginnings of two fundamental shifts in computing,” highlighting the transition to machine learning and AI’s emergence as an industrial capability. The company projects fourth-quarter revenue of $37.5 billion, with Oracle Corp. already planning AI computing clusters scaling to over 131,000 Blackwell GPUs.

Price Action: Nvidia’s stock has surged more than 196% year-to-date, significantly outperforming the broader market and its “Magnificent Seven” peers, including Apple Inc. at 23.3% and Microsoft Corp. at 11.4%, according to data from Benzinga Pro.

Read Next:

• November Small-Cap Surge Could Carry Into December’s Santa Rally, Historical Trends Suggest

Image Via Flickr

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

The Q3 reporting cycle has officially ended for the Mag 7 group following the release of Nvidia’s quarterly results yesterday. The group posted strong growth, though post-earnings reactions weren’t favorable for all.

But reports from Tesla TSLA and Amazon AMZN did spark post-earnings positivity, with shares of each seeing positive price action following their releases.

But what was there to like in each respective release? Let’s take a closer look.

Amazon's AWS Results Impress

Concerning headline figures in Amazon’s quarterly release, the company exceeded both consensus EPS and sales expectations handily. EPS grew a sizable 70% year-over-year, whereas sales of $60 billion reflected an 11% climb from the year-ago period.

However, the real highlight of the results was the AWS results. AWS sales jumped 19% year-over-year to $27.5 billion, matching the same growth pace we saw last quarter. While the growth pace didn’t reflect an acceleration, the results overall confirm underlying momentum.

Further, the profitability picture for AWS jumped higher, with operating income of $9.3 billion well above the $5.4 billion mark in the year-ago period. Below is a chart illustrating the company’s AWS results against our consensus expectations, with the recent $27.5 billion print falling $127 million short.

Like Tesla, analysts raised their earnings expectations for Amazon following the favorable release, with the stock boasting a Zacks Rank #2 (Buy).

Overall, the company’s dominant stance in the cloud paints a bright outlook for the company, particularly in the midst of this AI frenzy that we’ve all become accustomed to. AWS is the dominant player in the cloud computing market, flexing a significant market share globally. It provides various services, including computing power, storage, databases, and AI/ML tools.

Tesla Sees Higher Profitability

While EV delivery/production numbers were important, the real highlight of the release that caused shares to perk up was margin expansion, with the company’s gross margin expanding nicely to 19.8% vs. a 17.9% print in the same period last year.

Please note that the chart’s values are calculated on a trailing twelve-month basis.

Notably, Tesla reported its lowest-ever level of cost of goods sold (COGS) per vehicle throughout the period, which bodes favorably for upcoming periods as well. Analysts have raised their EPS expectations across the board following the release, with the stock now holding the highly-coveted Zacks Rank #1 (Strong Buy).

The stock’s current momentum is undeniable, partly boosted by the recent U.S. election. Growth is expected to resume in its next fiscal year, with our consensus FY25 expectations suggesting 30% EPS growth on 16% higher sales.

Bottom Line

With Nvidia's quarterly release finally out of the way, the Q3 reporting cycle for the broader Mag 7 group has ended. The group overall posted strong growth, though Amazon AMZN and Tesla TSLA were among the few to see post-earnings momentum.

A notable boost in profitability helped vault Tesla shares higher, with the stock also benefiting from the recent U.S. election. The company overall remains the prime selection for EV exposure, with growth expected to return in a big way during its next fiscal year.

A strong showing from AWS in Amazon’s release aided the bullish action post-earnings, with the results reflecting underlying momentum. The company remains a solid pick for the AI frenzy given its dominant cloud computing stance, with an upcoming holiday season also potentially providing near-term tailwinds.

Zacks Investment Research