Nvidia (NVDA) is gearing up to announce its third-quarter earnings after the closing bell on Tuesday, placing a focus on the fundamental aspects driving the ongoing artificial intelligence hype cycle. The market is buzzing with anticipation, especially following the recent departure of Sam Altman from OpenAI and his subsequent move to Microsoft (MSFT).
The company’s stock closed at an all-time high of $504.09 per share on Monday, reaffirming AI as a central theme for investors. Wall Street eyes this report keenly, as Nvidia continues to be a prominent figure in the AI narrative of 2023.
Key expectations from Bloomberg, contrasting the figures with the same quarter last year, include:
- Revenue: Expected at $16.1 billion compared to $5.93 billion in Q3 of the previous year.
- Adjusted EPS: Expected at $3.36, up from $0.58 in Q3 of last year.
- Data Center Revenue: Anticipated at $12.82 billion, a significant rise from $3.83 billion in Q3 last year.
- Gaming Revenue: Expected to reach $2.7 billion, up from $1.57 billion in Q3 of the previous year.
Investor attention will also be on the company’s revenue outlook, with Wall Street anticipating a fourth-quarter guidance of $17.8 billion. Nvidia’s revenue projections have been a source of surprise for investors throughout 2023.
In August, Nvidia’s stock soared to new heights after reporting second-quarter results that surpassed Wall Street’s expectations in both revenue and earnings per share. The guidance provided exceeded optimistic estimates, earning praise as “guidance for the ages.” Bank of America research analyst Vivek Arya expressed confidence in Nvidia beating consensus expectations in the upcoming report.
However, the stock experienced a temporary stumble in the months following the August report, with investors questioning Nvidia’s valuation. Concerns over chip restrictions in China further complicated the market’s assumptions about the company’s potential market size.
In response to the new restrictions, Nvidia stated in an SEC filing that it doesn’t foresee an immediate impact. Analysts, including Stifel’s Ruben Roy, anticipate similar commentary from Nvidia during Tuesday’s announcement. Roy emphasized the strong global demand for Nvidia’s products, especially outside of China, positioning the company as a key player in the AI growth landscape.
As one of the “Magnificent Seven” stocks driving market momentum this year, Nvidia’s performance remains a significant factor. Evercore ISI senior managing director Julian Emanuel cautioned investors to brace for potential “post-NVDA volatility,” underscoring the impact Nvidia has on the market.
In summary, Nvidia’s upcoming earnings report holds significance against the backdrop of AI dynamics, recent stock highs, and the company’s pivotal role in shaping the technology market’s trajectory.
