Wed. Nov 29th, 2023
    Elevated Expectations: Nvidia’s Q3 Earnings Report Sparks AI Excitement

    Nvidia (NVDA) is gearing up to release its highly anticipated third-quarter earnings report, giving investors a glimpse into the fundamental dynamics driving the artificial intelligence (AI) hype cycle. Following Monday’s record closing high of $504.09 per share, the spotlight is once again on AI as the tech giant solidifies its position as a frontrunner in the industry. The departure of Sam Altman from OpenAI and his subsequent move to Microsoft have added an extra layer of drama to the AI narrative.

    Wall Street’s expectations for Nvidia are soaring, with the company positioning itself as the face of the 2023 AI story. According to Bloomberg’s compilation, analysts expect Nvidia to report $16.1 billion in revenue this quarter, a significant increase from $5.93 billion in the same period last year. Adjusted EPS is expected to reach $3.36, up from $0.58 in Q3 of the previous year.

    Investors are particularly interested in the company’s data center revenue, which is projected to be approximately $12.82 billion, compared to $3.83 billion in Q3 2022. Similarly, gaming revenue is expected to rise to $2.7 billion, surpassing the $1.57 billion reported during the same quarter last year.

    Anticipation also surrounds Nvidia’s forecast for the fourth quarter. Analysts predict a guidance of $17.8 billion in revenue. Throughout this year, Nvidia has consistently surprised investors with its revenue projections, making them a key aspect to watch closely.

    While the stock initially experienced a surge following the second-quarter results, questions regarding Nvidia’s valuation and chip restrictions in China led to a brief stumble. However, the company promptly addressed concerns, stating that it does not foresee any immediate repercussions from the new restrictions.

    Stifel analyst Ruben Roy expects Nvidia to reaffirm this stance during the earnings call, emphasizing the significant global demand for Nvidia’s products, especially among cloud service providers. Roy also highlights the company’s strong potential in regions like Europe, Japan, and South Korea, where AI technology is gaining rapid traction.

    With Nvidia at the helm, the tech giant has become a key driver in this year’s stock market surge. The “Magnificent Seven” stocks, including Nvidia, Apple, Alphabet, Microsoft, Amazon, Meta, and Tesla, have collectively soared over 70% in 2023. In contrast, the remaining 493 stocks in the S&P 500 have only experienced a 6% increase.

    As the anticipation for Nvidia’s earnings report intensifies, experts like Evercore ISI’s Julian Emanuel caution investors to prepare for potential volatility in the stock’s performance. No matter the outcome, Nvidia’s influence on the tech industry remains unparalleled.


    1. What are the projected revenue figures for Nvidia in Q3?

    Analysts predict revenue of $16.1 billion for Nvidia in the third quarter, a substantial increase from $5.93 billion in the same period last year.

    2. How does Nvidia’s revenue guidance for Q4 compare to previous quarters?

    Wall Street expects Nvidia to provide revenue guidance of $17.8 billion for the fourth quarter, which aligns with the company’s track record of surpassing expectations throughout 2023.

    3. What factors have contributed to Nvidia’s stock market momentum?

    Nvidia’s stock has been a major driving force in the market this year, thanks to the company’s prominent position in the AI industry. As a key member of the “Magnificent Seven” stocks, Nvidia has witnessed significant growth alongside other tech giants such as Apple, Alphabet, Microsoft, Amazon, Meta, and Tesla.

    4. Will Nvidia be affected by chip restrictions in China?

    Nvidia has stated that it does not anticipate any immediate impact from the new chip restrictions imposed in China. The company remains optimistic about its global demand, particularly emphasizing opportunities in regions like the United States, Europe, Japan, and South Korea.