Nvidia Corp. (NVDA, Financial), a chipmaker and leader in computer processors and graphics, is set to release its third-quarter results on November 20, marking one of the last major tech earnings announcements of the year. The stock, which has risen more than 200% over the past year, remains a Wall Street favorite, largely due to its pivotal role in powering AI and data processing needs. Notably, highly regarded industry analyst Toshiya Hari of Goldman Sachs remains optimistic about Nvidia, with the stock currently trading at a P/E ratio below its historical average, positioning the company well to continue its outperformance.

Analyst Hari estimates Nvidia’s revenue from emerging business areas to reach around $1 billion for the October quarter (fiscal Q4), assuming supply remains steady and Blackwell GPUs are in full production this quarter. Demand for cloud services from clients like Alphabet (GOOG, Financial), Microsoft (MSFT, Financial), and Amazon (AMZN, Financial) remains strong, though execution is limited by supply constraints. For example, Microsoft projects Azure revenue to increase in the latter half of fiscal FY25, post-COVID, as additional capacity becomes available.

Supported by a positive outlook for the growth of the AI market, competitor Advanced Micro Devices recently raised its forecast for the AI accelerator market to $500 billion by 2028. While Hari acknowledges the potential risks of a slower AI adoption rate, which could impact infrastructure spending, he sees a near-term cyclical correction as minimal. Nvidia is expected to continue expanding across various AI use cases in the coming quarters.