Nvidia's Stock Rises Ahead of Microsoft and Meta Earnings Amidst Competition and Market Expectations

Nvidia (NVDA) stock inched up 2% ahead of Microsoft and Meta's earnings reports, where investors will watch for signs of continued spending on Nvidia's chips or potential shifts to in-house alternatives. Chipmakers AMD and Broadcom showed mixed moves. Based on analyst estimates, NVDA's average target price is $184.95 with a potential upside of 5.38% from the current price of $175.51.

NVIDIA (NVDA) stock climbed by approximately 2% on Thursday morning, reaching a new all-time high. Investors are closely watching Microsoft (MSFT) and Meta Platforms (META) for signs of continued spending on NVIDIA's GPUs, which are essential for AI model training. The recent rally underscores NVIDIA's central role in powering next-gen computing.

Microsoft reported fourth-quarter capital expenditures of $24 billion, surpassing analysts' expectations of $21.4 billion. Meta Platforms also boosted its 2025 capex floor to $66 billion-$72 billion, signaling continued AI hardware spending. These substantial budgets point directly to the demand for NVIDIA's H100 and A100 chips in cloud data centers. A new European project, Stargate Norway, a partnership of OpenAI, Nscale, and Akerplans, will deploy 100,000 NVIDIA GPUs in Narvik by the end of 2026 to run AI workloads on renewable energy.

Rival chipmakers also felt the positive impact. Advanced Micro Devices (AMD) inched up about 2%, while Broadcom (AVGO) added 1% before the opening bell. The accelerating AI investments highlight NVIDIA's pivotal role in the industry.

Based on the one-year price targets offered by 53 analysts, the average target price for NVIDIA Corp is $184.95, with a high estimate of $372.87 and a low estimate of $100.00. This implies an upside of +3.17% from the current price of $179.27 [1].

GuruFocus estimates the GF Value for NVIDIA Corp in one year to be $280.31, suggesting an upside of +56.36% from the current price of $179.27. The GF Value is calculated based on historical multiples and future estimates of the business' performance [1].

The semiconductor sector has long been a barometer of global technological progress but is also known for its volatility. The recent sell-off in July 2025, driven by macroeconomic jitters and regulatory uncertainties, has left investors questioning whether the dip in shares of AMD, Broadcom, and Nvidia represents a buying opportunity or a red flag [2].

The July 2025 sell-off was part of a broader market selloff triggered by concerns over U.S.-China trade tensions, inflationary pressures, and mixed earnings from tech giants. The sector's underperformance was amplified by its high valuations, with Nvidia's market cap briefly dipping below $4 trillion [2].

AMD's financials highlight disciplined capital management and strategic focus. As of 2024, its debt-to-equity ratio of 0.08x is among the lowest in the sector, providing ample flexibility for R&D and expansion into AI. Free cash flow surged 114.54% to $2.4 billion in 2024, driven by strong data center and computing segment performance [2].

Broadcom's Q1 2025 results showcased capital efficiency, with $6.013 billion in free cash flow and $10.083 billion in adjusted EBITDA. Its debt-to-equity ratio of 96.7% is high by tech standards, but the interest coverage ratio of 6.9x and $9.3 billion in cash reserves provide a buffer [2].

NVIDIA's dominance in AI is unmatched, with Q1 2025 revenue hitting $44.1 billion. The company's $3.3 trillion market cap is justified by its leadership in AI infrastructure, but its high valuation leaves little room for error [2].

The semiconductor sector's exposure to macroeconomic risks is undeniable. Inflation, interest rates, and geopolitical tensions could dampen demand for compute infrastructure. However, the long-term tailwinds of AI adoption, cloud expansion, and 5G deployment remain intact [2].

For value investors, the recent sell-off presents an opportunity to acquire undervalued shares of resilient tech firms. AMD's low debt and AI momentum make it a top pick for long-term growth. Broadcom's consistent cash flow and dividend yield offer a hybrid of growth and income. NVIDIA, while expensive, remains a must-own for its AI leadership, but investors should consider dollar-cost averaging to mitigate valuation risks [2].

References:

[1] https://uk.finance.yahoo.com/news/nvda-nvidia-poised-smash-records-144948367.html

[2] https://www.ainvest.com/news/navigating-semiconductor-sector-volatility-sell-tech-giants-amd-broadcom-nvidia-buying-opportunity-2508/