NVDA Stock On Track To Break 7-Day Losing Streak – Analyst Calls Nvidia’s Valuation Discount ‘Fundamentally Illogical’ Heading Into Earnings

• Raymond James raised its price target on Nvidia to $352 from $330 and maintained a ‘Strong Buy’ rating.
• The firm expects Nvidia's CPU revenue to grow from about 3% of sales today to roughly 5% by 2028.
• Meanwhile, Nvidia is also facing increased scrutiny over the resale and export of its AI hardware, including developments involving Russia and China.

Nvidia (NVDA) shares gained in premarket trade on Tuesday and appeared set to break their seven-day losing streak. Raymond James raised its price target on the stock to $352 from $330, calling the chipmaker’s valuation discount to the broader market “fundamentally illogical.”

In a note to investors cited by TheFly, Raymond James said Nvidia's CPU business is emerging as an increasingly important growth driver, with CPU revenue expected to rise from roughly 3% of total sales today to about 5% by 2028. The firm said CPUs could become one of Nvidia's fastest-growing businesses and eventually position the company as the world's largest CPU revenue generator.

It also stated that Nvidia's valuation discount to the broader market is “fundamentally illogical.” The stock trades at less than 15 times projected 2027 GAAP earnings, compared with roughly 18.6 times for the S&P 500, despite expectations for more than 20% growth in sales and net income.

NVDA stock gained as much as 1.2% in pre-market trade and was among the top trending tickers on Stocktwits at the time of writing. Raymond James’ price target implies a potential upside of almost 70% from Monday’s close.

Cisco Expands Nvidia AI Infrastructure Partnership

Cisco (CSCO) on Monday announced a partnership with Supermicro (SMCI) to expand its Secure AI Factory with Nvidia, adding high-density liquid- and air-cooled server systems to its AI infrastructure portfolio.

The company said the expanded offering is designed to provide enterprises, neoclouds, and sovereign cloud customers with a full-stack infrastructure platform for deploying large AI workloads. 

The partnership will combine Supermicro's rack-scale compute systems with Cisco's networking infrastructure. The offering will support AI workloads ranging from trillion-parameter training models to high-throughput inference, with platforms including Nvidia's Vera Rubin NVL72 and HGX Rubin NVL8.

Nvidia Hardware Faces Growing Scrutiny

The developments come amid increased attention on how Nvidia hardware is being used outside the company's direct customer base. The New York Times reported that Russia is using Nvidia Jetson Orin modules in autonomous AI-guided drones, according to Ukrainian officials. 

Another report by Reuters stated that Taiwanese prosecutors have indicted nine people, including employees of Nvidia and Super Micro, over alleged illegal exports of AI servers to China. The cases involve allegations including breach of trust and document forgery tied to exports of high-end AI servers.

How Is Retail Feeling About Nvidia Ahead Of Earnings?

On Stocktwits, retail sentiment around the AI bellwether rose to ‘neutral’ from ‘bearish’ territory over the past day, and chatter increased to ‘high’ from ‘low’ levels. 

According to a community poll on the platform, retail traders are divided on whether the stock will see a pre-earnings “surge” or “flush” ahead of its second-quarter report on Wednesday after market close. 

Wall Street is expecting Nvidia to report earnings per share (EPS) of $2.09 on revenue of $92.18 billion. Another poll on Stocktwits showed at retail traders are largely expecting the Jensen Huang-led company to beat estimates.

NVDA stock has gained over 17% over the past 12 months and 11% this year. 

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