03:49 PM EDT, 05/17/2024 (MT Newswires) -- Nvidia ( NVDA ) is likely poised for a beat-and-raise heading into its latest financial results amid an "insatiable" appetite for artificial intelligence accelerator among cloud service providers, Oppenheimer said Friday.

The semiconductor maker is scheduled to report its fiscal first-quarter results Wednesday. Oppenheimer expects non-GAAP earnings to jump to $5.68 a share from $1.09 a year earlier, with net sales seen surging 248% to $25.06 billion. Analysts polled by Capital IQ are looking for $5.57 and $24.49 billion, respectively.

An AI accelerator is a specialized hardware or software component that helps accelerate the performance of AI-based applications.

Oppenheimer expects strong performance at the company's data center business as supply constraints around its flagship H100 graphics processing unit continue to ease. The brokerage expects lead times to be less than 20 weeks, compared with a peak of about 50 weeks a year earlier, allowing Nvidia's ( NVDA ) management to better capture demand.

"We see InfiniBand share gains as durable near-term but remain attentive to rising open-source competitor, Ultra Ethernet," Oppenheimer analysts Rick Schafer, Wei Mok and Dustin Fowler said in a note. The company's new product cycles, including the upcoming H200 and B100, should help it sustain growth this year, according to the note.

Within Nvidia's ( NVDA ) gaming business, AI is unlikely to drive a "meaningful" personal computer refresh cycle this year, the analysts said. "However, we anticipate potential for content uplift in 2025 and beyond."

The company could achieve rack-scale top-line contribution in excess of $100 billion in calendar year 2025. "(Nvidia's ( NVDA )) move into rack-scale systems, leveraging the company's unique end-end software connectivity-accelerator platform, creates further distance (versus) competition," the trio wrote.

Oppenheimer increased its adjusted EPS outlook for Nvidia ( NVDA ) to $25.22 from $23.75 for fiscal 2025 and to $31.79 from $30.17 for fiscal 2026.

The brokerage reiterated its outperform rating and a $1,100 price target on the company's stock, saying it sees Nvidia ( NVDA ) best placed in AI, taking advantage of full stack AI hardware and software solutions. Nvidia's ( NVDA ) "entrenched" data center AI ecosystem is core to GenAI adoption, the analysts said, adding that they continue to be long-term buyers.

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