Following their Q3 results on Wednesday, Target TGT and Nvidia NVDA are two trending stocks that investors are certainly paying attention to.
Target’s stock has plunged over 20% since its lackluster Q3 report while Nvidia shares have been surprisingly flat despite topping estimates and posting another quarterly record for revenue.
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Target Misses Expectations
Target highlighted strengths in traffic and digital channels as a driver to Q3 sales of $25.66 billion which increased 1% year over year but fell short of estimates of $25.91 billion. Furthermore, Target CEO Brian Cornell mentioned unique challenges and cost pressures as a derailment to the company’s bottom line with Q3 earnings of $1.85 per share falling 12% from the comparative quarter and missing the Zacks EPS Consensus of $2.29 by -19%.
Inconsistency has had investors on the fence about Target’s stock with the omnichannel retailer previously exceeding Q2 EPS estimates by 19% in August with earnings at $2.57 per share versus expectations of $2.16.
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Nvidia’s Results Beat Again
Seeing continued demand for its artificial intelligence chips, Nvidia’s Q3 sales spiked 93% to a record $35.08 billion compared to $18.12 billion a year ago. This also topped Q3 sales estimates of $33.32 billion by 5%. More impressive, Q3 EPS of $0.81 doubled from $0.40 a share in the prior-year quarter and comfortably beat expectations of $0.75.
Nvidia has exceeded earnings expectations for eight straight quarters posting an average EPS surprise of 9.79% in its last four quarterly reports. Further illustrating Nvidia’s dominance is that the chip giant has beaten top line estimates for 23 consecutive quarters with an average sales surprise of 6.7% in its last four quarterly reports.
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Target’s Guidance
Providing EPS guidance for Q4, Target expects adjusted earnings of $1.85-$2.45 per share which is below the current Zacks Consensus of $2.62 or a 12% decline. For its full-year fiscal 2025, Target now projects an adjusted EPS range of $8.30-$8.90, below expectations of $9.54 or 7% growth. Notably, Target expects comparable Q4 sales to be flat and above Zacks estimates of $30.76 billion or a 3% decline.
Nvidia’s Guidance & Blackwell Update
Offering Q4 revenue guidance, Nvidia expects sales to be at $37.5 billion plus or minus 2% with Zacks estimates at $36.84 billion. While Nvidia’s guidance may have underwhelmed investors, the chipmaker stated its much anticipated Blackwell GPUs are already sold out for the next 12 months with shipments beginning this quarter and production set to ramp up next year.
The Blackwell GPUs are expected to be the highest-performance AI chips on the market, ahead of its previous H200 series and AMD’s AMD MI300 series.
Takeaway
Nvidia’s stock currently sports a Zacks Rank #1 (Strong Buy) with Target shares landing a Zacks Rank #3 (Hold). With Nvidia already benefiting from a positive trend of earnings estimate revisions, the chipmaker’s robust quarterly growth does suggest more upside as well.
Meanwhile, Target shares are trading at their cheapest P/E valuation in over a decade although there could still be better buying opportunities ahead considering the retailers subpar Q3 results.
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