Is Nvidia (NVDA) Stock a Buy Before Wednesday’s Earnings?

TLDR

• Nvidia stock closed down 4.42% at $225.32 on May 15, dragging other chip stocks lower
• UBS warned that 8 of the 12 largest semiconductor companies are “extremely crowded long” positions
• TD Cowen raised its NVDA price target to $275 from $235, citing a $1 trillion-plus order pipeline for Blackwell and Rubin
• Bank of America raised its target to $320 and Wells Fargo lifted theirs to $315, both reaffirming bullish outlooks
• Nvidia Q1 FY2027 earnings drop Wednesday, May 20 — investors want proof Blackwell demand stays strong

Nvidia heads into Wednesday’s earnings report with its stock under pressure, down 4.42% to $225.32 as of May 15. That dip has done nothing to cool analyst optimism.

NVIDIA Corporation, NVDA

The drop wasn’t limited to Nvidia. The entire semiconductor sector pulled back, with Micron falling 6.62%, Intel down 6.18%, AMD off 5.69%, Broadcom lower by 3.32%, and Marvell dropping 3.12%.

Still, these stocks have had a monster run. Since March 30, Intel surged 164%, Micron 125%, AMD 116%, Marvell 101%, and Nvidia itself gained 36%. At some point, profit-taking was always going to happen.

UBS flagged the crowding risk in a recent note. Their analysis found 8 of the 12 largest global semiconductor companies by market cap are extremely crowded long positions. The bank also warned that as hyperscalers move from asset-light to asset-heavy models, cash flow returns on investment could decline over the next three years.

They pointed specifically at Nvidia’s CFROI, which is expected to hit 82% this year. The concern: historically, just 0.09% of global stocks have sustained returns above 50% for five years, and only 0.02% for a decade.

Analysts Stay Bullish Into the Print

Despite the caution from UBS, most major analysts are still backing Nvidia.

TD Cowen’s Joshua Buchalter — ranked 69th out of 12,243 Wall Street analysts with a 72% success rate — raised his price target to $275 from $235. He noted that Nvidia’s own management sees its Blackwell and Rubin order pipeline exceeding $1 trillion, which he views as upside to current consensus estimates. He expects Nvidia to beat its quarterly revenue guidance by $1 billion to $2 billion.

Bank of America’s Vivek Arya, ranked 80th with a 65% success rate, raised his target to $320 from $300, keeping Nvidia as his top sector pick. His target is based on a 28x price-to-earnings multiple on his 2027 estimate, within Nvidia’s historical forward P/E range of 25 to 56. BofA also sees the AI data-center market potentially reaching $1.7 trillion by 2030.

Wells Fargo lifted its target to $315 from $265.

The Earnings Track Record Problem

Here’s the odd dynamic Nvidia finds itself in: the stock has a habit of falling even after strong earnings beats.

Deutsche Bank’s Ross Seymore recently warned that Nvidia’s expected growth over the next two years already appears to be reflected in the stock price, making a genuine upside surprise harder to deliver.

Nvidia’s last quarterly report showed record revenue of $68.1 billion with a non-GAAP gross margin of 75.2%.

BofA’s downside risks include weakness in gaming, competition from custom silicon, China export restrictions, lumpy enterprise sales, and increased government scrutiny.

All eyes on Wednesday.

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