Nvidia's earnings report — specifically its forecast for the current quarter — is likely to disappoint Wall Street this week, said Susquehanna's Christopher Rolland, but he's upgrading the stock anyway.

"To be clear, this is not a call on NVIDIA's quarter … in fact, we think the odds are substantial that management's guidance will miss the Street's 4Q," wrote Rolland in the note to clients on Tuesday. "However, we believe the company's near-term issues should pass in a quarter (or two), while valuation supports greatly reduced estimates and longer-term opportunities abound."

Rolland upgraded Nvidia to the firm's "positive" rating from neutral. He lowered his price target to $230 from $250, however.

The once high-flying chip stock and favorite of traders has been pounded during this stock market correction, which began in October. The stock is down 23 percent in the last one month and is now in the red for the year. Nvidia shares rose 1.6 percent to $192.55 in premarket trading Tuesday.

Nvidia hit an all-time high of $292.76 on Oct. 2 before the selling began. The company reports Thursday after the bell.

Added Rolland: "We believe that substantial channel inventory is a result of the crypto-GPU hangover, but secondarily the potential pull-in of GPU builds in front of September's 10% tariff (and perhaps January's 25%). As evidenced by retail graphics card prices that have fallen from an 89% mark-up to MSRP in April to just +19% at the end of October (and stabilizing in November), we believe the channel is near clearing (perhaps another quarter or two, although we note AMD may be behind NVIDIA by another quarter)."