Nvidia Poised for Strong Q2 Results Amid Surging AI Demand

Nvidia Expected To Post Another Strong Quarter on AI Demand, Analysts Say

As anticipation of Nvidia's (NVDA) upcoming earnings report builds, Raymond James analysts said they expect a solid quarter on demand for its artificial intelligence (AI) chips. "We are looking for another strong quarter from NVDA despite the noise surrounding Blackwell delays," the analysts said, reiterating a "strong buy" rating for the stock. Reported delays in the Blackwell chip sent Nvidia's stock price tumbling earlier this month, though the chipmaker has said production is on track to ramp in the second half of the year, as planned. Investors are likely to be watching for indicators of the delay's impact in the upcoming earnings report due for release on Aug. 28. The analysts said they anticipate a "modest" contribution from Blackwell in the fiscal third quarter and that delays could drive sales of Hopper, the Blackwell chip's predecessor, in the near term. They suggest that "a longer delay could increase the risk of a customer spending pause," but added that they "have no reason to doubt" Nvidia's capability to ship Blackwell by the end of the year. Raymond James analysts were not alone, as other analysts have indicated worries about the impact of delays may be overblown. The analysts said their checks with hyperscale customers and supply chain partners suggest no slowdown in demand as big tech companies ramp up spending on AI infrastructure, supporting Nvidia's data center sales. The analysts highlighted that Nvidia beat revenue and outlook expectations in its past four earnings reports. While Nvidia has historically outperformed analysts' projections, the market's expectations around the AI darlings' performance have grown, setting an increasingly higher bar for the chipmaker. Nvidia shares closed about 1% higher at $128.50 Wednesday. The stock has more than doubled in value since the start of the year.

Top Analyst Says Nvidia Poised For Strong Q2 Results: 'There's Still A Ton Of Spending On The AI Chips' - NVIDIA (NASDAQ:NVDA)

According to predictions by Wedbush Securities, Nvidia Corp. NVDA is poised to report another strong quarter of earnings, propelled by the current surge in AI spending. What Happened: In a CNBC interview on Monday, Wedbush Securities expressed continued confidence in the Jensen Huang-led chip giant ahead of its second-quarter earnings announcement on Aug. 28. The firm had earlier projected a $1 trillion "tidal wave" of AI spending, which is now in full effect. Wedbush's SVP of equity research, Matt Bryson, attributed the recent drop in Nvidia shares to worries about diminishing demand for the company's AI chips and potential problems with Blackwell, its upcoming GPU. However, he pointed out that many of Nvidia's key customers, including Foxconn and Supermicro, have reported strong profits, partially due to increased AI investment. "What's fueling it is there's still a ton of spending on the AI chips that Nvidia makes," Bryson pointed out. Despite some analysts' doubts about Nvidia's success, Bryson maintains a "buy" rating for the company, expecting another strong quarter. He noted, "There just doesn't seem to be any change in momentum from their customer base." See Also: Mary Trump: 'Donald's Narcissistic Injury Is So Great That He Has Essentially Stopped Campaigning' Why It Matters: The upcoming earnings report from Nvidia could be a turning point for the company. Investors worldwide are eagerly awaiting insights from CEO Jensen Huang on the future demand for AI chips through 2025. Despite concerns about the timing of the Blackwell GPU launch, Goldman Sachs remains bullish on Nvidia's long-term growth trajectory, particularly driven by strong demand from cloud service providers (CSPs) and enterprises for artificial intelligence. Former Google CEO Eric Schmidt highlighted Nvidia as a key player in the AI market, noting that large tech companies are planning substantial investments in Nvidia-based AI data centers, potentially costing up to $300 billion. Price Action: On Tuesday, Nvidia was trading at $129.16, which is 0.65% lower than its Monday's close of $130.00, according to Benzinga Pro. Read Next: Elon Musk Is The Richest Person In The World -- How Much Does He Pay Employees At Tesla, SpaceX And X? Image via Shutterstock This story was generated using Benzinga Neuro and edited by Pooja Rajkumari Market News and Data brought to you by Benzinga APIs

Nvidia earnings preview: Blackwell commentary to overshadow guidance numbers By Investing.com

AI darling Nvidia (NASDAQ:NVDA) will report its second-quarter results of fiscal 2025 on Aug. 28, with significant attention expected on management's comments regarding potential delays in the release of its next-generation Blackwell (BW) chip, and the company's ability to meet demand. Stifel analysts said Monday their discussions with industry participants revealed that any delays are likely to be measured in months rather than quarters. In the interim, feedback on the demand for H-Series chips remains positive. As a result, the investment bank again expects a beat-and-raise scenario for Nvidia's upcoming results and guidance. "We are not expecting any meaningful change in tone or messaging relative to what NVDA has focused on since the company reported its F1Q results, i.e. the company's longer-term road map and continued investment in organic and collaborative software offerings," Stifel analysts said in a note. Moreover, they believe that recent commentary from optical transceiver module supply chain companies indicates rapidly increasing cluster sizes, which could benefit the chipmaker ahead of the calendar year 2025. Separately, UBS analysts said they see upside to Nvidi'a July print, anticipating continued strength from the data center segment, which could reach as high as $26 billion, above the Street's estimate of $25 billion. Key bullish indicators include strong results from SMCI driven by Hopper demand, significant quarter-over-quarter growth in high-performance computing for TSMC, robust results in KYEC's data processing segment, and strong AI server sales from Quanta Computer. However, Taiwan's data processing export data suggests a lower figure, though analysts note this data's historical variability and its exclusion of critical Nvidia revenue streams like H20 ramping in China and networking. For guidance, UBS expects strong demand for Hopper and H200 to drive Nvidia to guide toward $31-32 billion, with an implied data center revenue close to $28 billion. "We believe investor bogeys are already in this range (Street revenue is ~$31.5B) which optically doesn't create a great setup, but we believe Blackwell commentary will overshadow wherever guidance comes out as investors are already looking to the BW ramp in 2025, and we believe NVDA will generally communicate that BW is "on track"," said UBS analysts. The main concern is how Nvidia will address its previous statement about expecting "significant" Blackwell revenue this year, which analysts believe was unrealistic given that customer volume shipments were initially set for mid-December and have now been delayed by 4-6 weeks.

Here Is Why Nvidia Is A Buy Ahead Of Earnings (NASDAQ:NVDA)

Nvidia holds 80% of the AI chip market, dominating with its GPUs and CUDA platform. Previously skeptical due to Nvidia Corporation's (NASDAQ:NVDA) high valuation, I changed my thesis to bullish about a year ago. Since then, Nvidia has taken off to the races with a $3 trillion market cap. In less than a year, this company has ballooned to prove its stock belongs at lofty valuations with solid execution, innovation, and demand. We maintain a strong buy rating for Nvidia Corporation stock ahead of its August 28th earnings report. Our confidence stems from Nvidia's leadership in AI, cloud computing, and advanced graphics, which continues to drive market enthusiasm. Nvidia's GPUs are essential to the AI revolution, ensuring ongoing demand across data centers, cloud services, and machine learning applications. Nvidia has almost monopolized the AI chip market at about 80%, all thanks to its cutting-edge GPUs and CUDA platform, which made it the premier solution among leading cloud service providers. Finally, due to the increased demand for its chips, Nvidia is also expected to beat the upcoming Q2 earnings again. NVDA trades around $130, which sits below the average price target of $143 for 2024, suggesting a potential upside. This average target aligns with the Fibonacci (three-point) retracement level of 0.786, indicating a potential resistance or support level based on past price movements. The optimistic price target of $162, which aligns with the 1.0 Fibonacci level, suggests that, under favorable conditions, NVDA could experience significant gains. Conversely, the pessimistic target of $116 aligns with the 0.382 Fibonacci retracement level, representing a potential downside risk if market conditions deteriorate. The Relative Strength Index (RSI) at 66.83 points to a generally bullish solid trend since it is above the 50 mark and indicates an uptrend with an upward reversal. The presence of a bullish divergence further supports a positive price movement expectation, implying that momentum is strengthening despite price movements. No bearish divergence is noted, reducing the risk of potential downtrends. The Volume Price Trend (VPT) is also favorable over the midterm, as it shows an upward trend and a reversion upwards from its moving average, currently at 15.79 billion. This positive divergence supports the RSI's bullish signal and suggests increasing buying pressure. Considering monthly seasonality (over 26 years), there is a 77% probability of positive returns if an investment is made in August 2024, adding a seasonal advantage to the technical indicators. Nvidia could beat earnings driven by proven strong revenue growth and profit from more than one high-growth sector. In the past five years, the company managed to grow its revenue from $10.9 billion in fiscal year 2020 to a more solid $60.9 billion during fiscal year 2024. As one dives into the trajectory of fiscal Q1 2025, which is consistently upheld, Nvidia has generated $26 billion in revenues while operating margins hit 69%. These numbers underline Nvidia's position as a company that can ride the waves in two rocketing markets: AI and data centers. In addition, such data shed light on other previously unnoticeable trends, such as the 75% CAGR of data center revenues and growth that persisted for the fifth consecutive year and added as much as $22.6 billion for Q1 2025. Earnings outperformance should be driven by a dominant position in data centers, backed by the surge in AI demand and strategic partnerships. Nvidia has a diverse portfolio, which backs up earnings potential in numerous sectors. Gaming revenue has contributed a meaningful chunk to the top line, now growing at an 11% compound annual growth rate for the ninth year straight; this is considered a very resilient result, proving demand for Nvidia's GPUs continues. Moreover, two other lines of business with great potential within Nvidia -- the professional visualization and automotive sectors -- are currently more minor contributors to overall revenue. More importantly, they have enormous potential, not least of which is that Nvidia continues to innovate with efforts such as autonomous driving based on the Nvidia DRIVE platform and next-gen AI-driven solutions. With that presence on growth in areas of the highest demand and most leading-edge industries in AI, gaming, and autonomous driving, Nvidia's numerous revenue streams make it well-prepared to beat earnings expectations and continue a cycle of strong financial performance. Lastly, Nvidia has consistently beaten earnings estimates in recent quarters, with slight but steady EPS outperformance across fiscal 2024 and fiscal 2025 so far. The upcoming earnings for Q2 2025 look promising, with a significant 137.16% year-over-year EPS growth expected, supported by Nvidia's leadership in the AI and data center markets. Despite a potential decline in the YoY EPS growth rate for subsequent quarters, Nvidia's earnings momentum appears strong, indicating a solid chance of continued outperformance. Nvidia dominates the AI chip market, with an estimated 80% market share. Most of this originates from its leading-edge GPUs, now the de facto standard for training and deploying AI models in data centers. CUDA software from Nvidia further undergirds this monopoly by being used as the AI developer's platform. Competitors such as Advanced Micro Devices (AMD) and Intel (INTC) have taken a swing at Nvidia. AMD launched Instinct MI300X, and Intel rolled out its Gaudi 3 AI accelerator. However, these companies primarily compete in specialized sub-niches rather than the broader general training market, which remains Nvidia's core strength and primary focus. Furthermore, deep integration into the operations of large cloud service providers such as Amazon (AMZN), Microsoft (MSFT), and Google (GOOG) -- each dependent on Nvidia's GPUs to power their respective AI infrastructure -- is also backing up Nvidia's dominance. More than 40% of Nvidia's revenue in the quarter came from its top customers. While these companies have chips waiting in the pipeline, they remain very reliant on Nvidia and its high-performance GPUs. For example, even though Amazon's in-house chip includes Inferentia and Tranium chips for AI tasks, it continues to glorify the efficiency customers with Nvidia GPUs can achieve. Google deploys the TPUs internally but offers access to the Nvidia chips through its cloud services. This situation means that these massive customers continue using Nvidia's superior hardware, further entrenching the company's position as the core player in the AI infrastructure market. In summary, Nvidia holds an almost monopolistic position in the AI chip market, driven by its technological superiority, robust software ecosystem, and strong partnerships with major cloud providers. While competitors, such as AMD and Intel, are well on the way to catching up, they still have quite a long way to go regarding market share and capability. That does not include the innovation Nvidia continues to bring forward. The industry relies on its GPUs, and it will only continue to grow significantly into the future, even with new entrants that try to assert their presence within the space. Nvidia's consistent innovation, including its new Blackwell GPU series release, ensures it remains at the forefront of AI advancements. With solid customer reliance and a growing ecosystem, Nvidia is well-positioned to maintain its monopoly-like status in the rapidly expanding AI market, making it a key player to watch as the AI revolution unfolds.

Nvidia Stock: The AI Fatigue Myth (NASDAQ:NVDA)

Large corporations are still spending a ton of money on AI products, leading to further Data Center-related upside potential. Nvidia Corporation (NASDAQ:NVDA), as well as other semiconductor companies, including Advanced Micro Devices (AMD) and Taiwan Semiconductor Manufacturing Company (TSM), recently went into a correction, causing escalating worries about a bursting AI bubble. Nvidia dropped from $141 in June to about $90 per-share in early July, but shares have now rebounded to about $130 today, reflecting growing investor confidence ahead of the Q2 report. In my opinion, "AI fatigue" is a myth and Nvidia could be a promising buy a week before the company is set to face a big catalyst with its upcoming earnings release for the second fiscal quarter. Given the company's history of outperformance, positive EPS revision trend as well as the upcoming Blackwell launch, the risk profile remains widely favorable. While shares are not a total bargain, they are not expensive either, and there is plenty of evidence that suggests that AI will remain a fundamental business driver for Nvidia going forward! I rated shares of Nvidia a buy after the chipmaker presented results for its first fiscal quarter due to what I considered was an attractive catalyst landscape as well as a dramatically improved earnings picture: "Profit Explosion And Stock Split Are Game-Changers." In relation to this, I upgraded shares of AMD to strong buy as well in "The AI Boom Is Just Getting Started For AMD." The company experienced a significant boost to its Data Center growth (+115% Y/Y) in the last quarter. In my opinion, this will allow the company to generate significant free cash flow gains in the second half of the year as well as in FY 2025. For Nvidia, I see several catalysts as well, including continual AI spending, and EPS revision momentum indicates that analysts continue to expect big things from Nvidia next week. In my past work on Nvidia, I said that the chipmaker's core competitive advantages relate to two factors: Together, both factors have already led to significant momentum in the Data Center business, and the next upcoming catalyst for Nvidia is the Blackwell launch. Blackwell AI chips are set to succeed the H100 flagship product and will ship later this year. Nvidia is also set to release RTX 50-Series graphics processing units in the coming quarters, creating an additional non-Data Center catalyst for revenue growth. The launch of Blackwell chips could give new impulses to Nvidia's Data Center business. Nvidia is set to release Q2 '25 earnings on August 28, 2024, and it is likely that the company will see another sequential revenue deceleration given its lack of new product releases. But the Blackwell chips are set to change this, and any new management remarks about the order status of Blackwell products would likely be a major positive catalyst for Nvidia's shares. I expect to see a revenue deceleration in Nvidia's Data Centers for Q2 '25, but expect revenues to accelerate again when Nvidia's Blackwell timeline becomes clear and its newest flagship product launches later this year. In total, I expect Nvidia to report $28.8B in revenue for the second-quarter and therefore beat its baseline guidance by $800M (my estimates for Nvidia's Q2 '25 are in the right-most column in the table below). (Source: Author) One factor why I believe Nvidia is set to crush expectations is because big corporations don't show any signs of slowing down their AI spending. AI spending trends are fully intact. Companies like Alphabet (GOOGL) (GOOG), Meta Platforms (META) and Microsoft (MSFT) are set to continue to spend billions of dollars per quarter on AI technology... which is set to benefit all AI hardware companies, but especially Nvidia, which dominates the GPU market. That large corporations are not cutting back on AI spending further debunks the notion that the market has cooled on AI-themed investments like Nvidia. In my opinion, Nvidia is set to see positive EPS upside revisions after the release of second-quarter earnings on August 28th. The company will likely submit a strong guidance for the next quarter as well as give an update about its Blackwell expectations. Nvidia is expected to report $0.64 per-share in earnings for Q2 '25, as per consensus, for its second fiscal quarter, implying 137% year-over-year growth. Importantly, the EPS trend is very positive ahead of the earnings release, with Nvidia receiving 37 EPS upside estimate revisions compared to just 2 downside estimate revisions. The market is clearly expecting a blockbuster earnings release for Nvidia. The EPS revision trend also strongly shows that the market does not expect an AI fatigue to impact Nvidia's second-quarter earnings. Nvidia is currently valued at a price-to-earnings ratio of 33.6X, and shares have seen a sharp upside revaluation since the early August sell-off that pushed shares close to $90. AMD, by comparison, is trading at a price-to-earnings ratio of 28.9X. I have aggressively added to my AMD position in the last month, in part because the chipmaker sees massive momentum in its Data Center business after it launched its MI300 chips. In my last work on Nvidia, I stated that the chipmaker could have a fair value of $122 per-share (post-split), based off a fair value P/E ratio of 35.0X. EPS estimates have reset much higher in the last ninety days, however, as fears over weakening AI spending and a recession subsided. The consensus EPS estimate for FY 2026 (Nvidia's next financial year) is $3.81 per-share. Applying a 35X earnings multiplier yields a potential fair value of $133 per-share, but with major EPS revisions likely to take place post-earnings, Nvidia has a serious catalyst to expand its valuation. The $3.81 per-share EPS estimate also appears conservative to me, considering that it implies a Y/Y growth rate of only 39%. In the last quarter, Nvidia grew its adjusted non-GAAP EPS 461% Y/Y. Therefore, I believe the chipmaker could significantly outperform EPS targets for this year and next year, and new extended EPS revision momentum post-earnings could be a catalyst for shares to revalue higher as well. I expect at least a 50% growth rate in EPS next year, given Nvidia's upcoming Blackwell and RTX 50-Series GPU launches, which implies a $4.10 EPS baseline and a fair value (based off the 35X multiplier) of at least $144 per-share. Nvidia's risk profile has further improved lately as Intel (INTC) is looking at another major restructuring: Disaster Strikes, What Now? This restructuring could prevent Intel from going on the offensive in the Data Center market, which is where the company is already lagging far behind the competition with the launch of its AI chip, the Gaudi 3 AI accelerator. With Intel more focused on reorganizing its operating portfolio and laying off people, Nvidia's value proposition for the Data Center GPU market has only further improved, in my opinion. What would change my mind about Nvidia is if the company were to issue a weak revenue guidance for Q3 '25 or if the corporate sector did a U-turn on AI spending. I don't see any evidence of an AI fatigue ahead of the company's second-quarter earnings... which are expected to be released on August 28, 2024. In fact, I see the opposite: the EPS revision momentum ahead of Q2 is widely positive, with upside EPS revisions outnumbering downside revisions 18.5:1. Secondly, large enterprises in the technology industry, mainly the big tech companies, are not showing any indication of slowing AI spending. Thirdly, AMD's earnings for Q2 showed a 115% jump in Data Center revenues, indicating that demand for AI chips remains red-hot. There may be the possibility, however, of companies scaling back H100 purchases in the short term as they wait for the release of the newest Blackwell chip, but once Blackwell launches, Nvidia could potentially see a revenue acceleration again. With Nvidia likely set to deliver another blow-out earnings report (and guidance) on August 28, 2024, I believe we could see a new wave of EPS estimate upside revisions as well. This could be a potent catalyst for an upside revaluation.