I last wrote about NVIDIA ((NVDA Quick QuoteNVDA - Free Report) ) as the Bull of the Day in early August to preview their Q2 report and to explain why I thought investors should be buying any dips back toward $425.

I surmised “Shares have ramped, but analysts still underestimate the King of AI and its new paradigm.”

Then in the weeks leading up to the company’s August 23 report, I kept encouraging my TAZR Trader members to buy the dip while they had the chance because I expected a bigger beat-and-raise quarter than most of Wall Street was imagining.

Here were 3 points I highlighted in an August 22 note…

The big story Monday (8/21) was the monster +8.5% rally in NVDA, after HSBC raised their PT to $780.

The problem is that the analyst, Frank Lee, was the same guy who said "Sell" in November at $120 and then stayed at Sell in March when we were saying "BUY MOAR!"

So this is really just one of those "I was way wrong so now I'm gonna steal the headlines" calls.

Don't get me wrong -- I see $750 in the next 18 months if the demand train keeps rolling.

But it will be a somewhat bumpy ride.

Case in point, this morning, we saw another gap open to nearly $482 (new highs by a buck) and a quick fade as last week's smart bulls cashed some quick gains. From $475 to $405 and back in a month is pretty volatile.

So all this frenzy means it's time to talk a bit about what to expect.

First, we were right in June about planning for a big beat and raise quarter, and why you should still buy at $425.

My thesis was that the Street was way-underestimating what was coming with another big beat-and-raise due to off-the-charts demand for DGX systems built with Hopper and Ampere cards -- and anything else left in inventory.

The past two months have been all about analysts catching up to that reality.

Second, the flurry of volatility here is largely psychological (good ole greed and fear), but also large firms getting better positioned in options ahead of tomorrow.

Third, there is a possibility that lots -- not all -- of the coming good news is priced-in at $475.

You see, as analysts wrapped their spreadsheets around demand, supply, pricing, and what those smoothed trajectories look like over the next 2-4 quarters, they can't extrapolate that blow-out beat-and-raise numbers will continue into CY '25.

Some of course will do that. But what matters is what the majority do.

As I talked about last week, I expect a beat to Q2's guide of $11B by at least $1B. And the Q3 guide could be $14B or higher (consensus $12B).

Most of the Street isn't as optimistic. So if we get this kind of beat-raise on the topline, the stock should go to new highs above $500.

But I can't know what Q4 looks like, let alone next year. And maybe that's what matters most right now.

Also worth noting is that next year's topline consensus just crept up another $5B to $60B, for 38% growth.

Either way, I'm glad to have kept you aboard the Jensen Huang AI Starship and deciding whether we take some profits at $500 or wait until $550 is a good problem to have.

(end of TAZR 8/22 commentary excerpts)

I share this to show you some good and proven ways to always think about NVIDIA as an investor moreso than a trader.

Because look what happened with the Starship Jensen’s results and guidance: They blew the roof off with a roughly $2 billion beat on the Q2 top line and then forecasted almost a $4 billion beat for the current Q3.

This means that the crowd of spreadsheet jockeys (Wall Street analysts), who have been underestimating NVIDIA’s growth in hyper-scale accelerated computing, have spent the last two weeks punching new, much more bullish assumptions into their models that keep NVDA a Zacks #1 Rank.

Here are where their consensus revenue projections stand now on the Zacks Detailed Estimates page…

FY’24 (ends January): $53 billion for 97% growth
FY’25 (begins in Feb): $76 billion for 43% growth

And there’s profit optimism too…

FY’24 EPS consensus just moved from $7.79 to $10.46
FY'25 EPS consensus just moved from $10.77 to $15.48 (48% annual growth after the current year’s 210%+ advance!)

Based on these revenue and profit estimates for next year, NVDA trades at 30X EPS and only 16X sales. As I described in my June video and article, NVDA should continue to trade at a premium of 20X sales as it progresses to $100 billion in annual revenue…

Nvidia DGX: Workhorse of AI Will Drive NVDA to $2 Trillion

For the past seven years since I first learned about what Jensen was creating from GPU gaming cards, I’ve said that the key to NVIDIA innovation dominating the world of hyperscale accelerated computing revolved around three factors…

1) The capabilities of GPU stacks creating "massively parallel architectures" for harnessing big-data with modeling, automation, and simulation

2) The CUDA hardware + software stack that enables fast training and deployment of machine learning and deep learning models

3) The evangelism of thousand of developers who get ingrained in the platform tools and never want to leave that ecosystem

Long-time Apple evangelist Gene Munster recently said the same thing…

“CUDA has created a moat around Nvidia's chip business. It would be difficult to get developers to switch to a different platform.”

And that’s why observers like me and Dan Ives of Wedbush think that this is the iPhone moment for NVIDIA and its AI tools.

In conclusion, let's hear from the AI wizard himself, Jensen Huang…

"The world has something along the lines of about a trillion dollars' worth of data centers installed in the cloud and enterprise. And that trillion dollars of data centers is in the process of transitioning into accelerated computing and generative AI."

I think this translates into NVIDIA hitting $100 billion per year in revenue much sooner than my 2026 projection in June. So don’t miss your chance to buy NVDA under $450 again. I’m pretty sure you won’t see it below $400 ever again.