Citibank's report stated that Nvidia (NVDA.US) is expected to report its quarter ending in October after the market closes on the 20th of this month. The bank predicts total sales and datacenter sales for the quarter to be $33 billion each, taking into account the situation with Blackwell. It is estimated that the non-GAAP earnings per share for the quarter will be $0.72 (market expects $0.74).

As for the quarter ending in January next year, the bank has raised its datacenter sales forecast to around $3 billion to $4 billion, as the company has resolved the mask issue with Blackwell but still faces supply constraints. The bank predicts total sales and datacenter sales to be $36.5 billion and $32 billion respectively, with a gross margin of 73%, lower than market expectations, mainly due to the higher proportion of H200. The bank expects Nvidia to have a larger 'outperforming and upward revision' scenario for the quarter ending in April next year as the gross margin improves with the increased proportion of Blackwell.

Based on higher datacenter sales, Citibank has raised Nvidia's earnings per share forecast for fiscal years 2025 to 2027 by 10 cents, 55 cents, and 8 cents, and has raised the target price from $150 to $170, which corresponds to a projected P/E ratio of 35 times for the fiscal year 2025. The rating remains 'buy'. (vc/w)

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