Nvidia is poised to unveil its third-quarter (Q3) earnings report on Tuesday, capturing the attention of Wall Street, which is eagerly anticipating insights into the core drivers of the ongoing artificial intelligence (AI) hype cycle. The report follows a record high close of $504.09 per share on Monday, as AI once again takes center stage for investors amid the notable departure of Sam Altman from OpenAI, the maker of ChatGPT, and his subsequent move to join Microsoft (MSFT).
As the face of the 2023 AI narrative, the tech giant’s performance is under scrutiny. Analysts, as compiled by Bloomberg, have set high expectations for the the Q3 earnings of Nvidia, drawing comparisons with the same period last year:
– Revenue: Wall Street anticipates $16.1 billion, a substantial increase from $5.93 billion in Q3 last year.
– Adjusted EPS: Expectations stand at $3.36, a notable surge from $0.58 in Q3 last year.
– Data center revenue: Analysts project $12.82 billion, compared to $3.83 billion in Q3 last year.
– Gaming revenue: A forecast of $2.7 billion, up from $1.57 billion in Q3 last year.
Investors are particularly interested in Nvidia’s revenue outlook, with a fourth-quarter guidance expected at $17.8 billion. Notably, revenue guidance has been a source of surprises for investors throughout 2023.
In August, Nvidia achieved an all-time high following second-quarter results that exceeded Wall Street’s expectations on revenue and earnings per share, coupled with guidance that surpassed lofty estimates. This positive momentum continued into May when an analyst referred to the company’s forecast as “guidance for the ages.”
Bank of America research analyst Vivek Arya remains optimistic about the Q3 earnings of Nvidia, anticipating it to outperform consensus expectations. The firm maintains a positive stance on the stock, citing its “compelling” valuation and favorable seasonal trends.
However, the stock experienced a brief stumble in the months following the August report. Investors began questioning Nvidia’s valuation, and concerns about chip restrictions in China challenged assumptions about the potential market size. In response, the company, in an SEC filing, expressed confidence in not experiencing near-term impacts from the new restrictions.
Stifel analyst Ruben Roy expects similar reassurances from Nvidia on Tuesday, highlighting robust global demand, particularly outside China. Roy emphasizes Nvidia’s position as a key player in the growth of AI, noting significant opportunities in the US and international markets.
Nvidia has been a significant driver of momentum in the stock market this year, aligning with other tech giants in the “Magnificent Seven” stocks, including Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), Meta (META), and Tesla (TSLA). Together, these stocks have outperformed the broader market, gaining more than 70% through mid-November, in contrast to a 6% rise for the remaining 493 stocks in the S&P 500.
Evercore ISI senior managing director Julian Emanuel underscores the dominance of Nvidia, cautioning investors to brace for “post-NVDA volatility” regardless of the stock’s direction. As the tech giant continues to shape the AI landscape, its performance remains a key focal point for market observers.
Source Yahoo Finance
