Nvidia's Earnings Outlook: Riding the AI Wave Amid Tech Spending Surge

Nvidia to keep surfing tech spending wave: Earnings week ahead

(Bloomberg) -- Expectations heading into Nvidia Corp.'s Wednesday report are high, with analysts anticipating another strong consensus beat that could prompt the chipmaker to raise its profit guidance. Nvidia is a direct beneficiary of the intense spending by companies building out artificial intelligence infrastructure, with the bonanza also set to show up in upcoming results of HP Inc. and Dell Technologies Inc. The week will also see a decidedly divergent set of results from Canadian lenders. Royal Bank of Canada is expected to post healthy growth across its interest and non-interest income segments, while higher provisions for loan losses will eat into Bank of Montreal and Bank of Nova Scotia earnings. Monday: Heico (HEI US) 2024 sales could come in higher than forecast if its plane replacement parts business continues to benefit from increased air traffic and an aging commercial fleet, Jefferies said. Quarterly revenue likely rose 38 per cent versus 27 per cent a year earlier. Tuesday: SentinelOne (S US) hasn't seen an influx of new customers from last month's global tech disruptions triggered by rival CrowdStrike as the incident occurred too late in the quarter for companies to change vendors. Still, there appears to be increased interest from existing CrowdStrike customers looking to make the switch, Keybank said. The California-based firm is seen posting a 32 per cent jump in revenue. Wednesday: Nvidia (NVDA US) could score a significant beat and raise its outlook for the third quarter as it continues to ride the AI momentum, BI said. Revenue and adjusted earnings are forecast to more than double from a year ago. Expect investors to seek management reassurances about possible delays affecting the development of its Blackwell chip lineup, Susquehanna said. Thursday: Gap's (GAP US) adjusted EPS is seen rising 17 per cent, its third straight quarter of growth, with revitalized offerings at Old Navy, social-media campaigns and collaborations driving robust sales in May and June, BI said. Fresh concepts are also seen helping Abercrombie & Fitch (ANF US) post a sales beat when it reports Wednesday, BI said.

Nvidia expected to beat, guidance will be key: Evercore By Investing.com

Nvidia (NASDAQ:NVDA) is due to report earnings this week and while an above-consensus print is expected, the spotlight will be on guidance "as investors remain skittish on AI adoption," Evercore ISI strategists said in a note. Notably, only 5% of U.S. businesses currently utilize AI, according to Evercore. Moreover, hyperscale capital expenditures, which have been closely linked to semiconductor sales, are expected to slow down in the second half of 2024. As AI continues to expand its influence across various sectors, periods of market weakness are seen as buying opportunities. Signs of AI making inroads into traditionally difficult-to-automate sectors, such as retail, are emerging, strategists said, highlighting Walmart's use of GenAI to enhance productivity. Evercore said its Strategy team has updated its list of "AI Revolutionaries," which includes companies that are showing increasing mentions of AI, improving earnings per share (EPS), and offering attractive relative valuations. Nvidia, Coca-Cola (NYSE:KO), and State Street (NYSE:STT) are on the list. Small-cap stocks and companies with significant buyback exposure are also included. Nvidia will report its second-quarter earnings for fiscal 2025 after the market closes on Wednesday. Analysts on Wall Street anticipate the chipmaker's revenue to increase to $28.84 billion, which would represent more than double the revenue from the same quarter last year, according to estimates from Visible Alpha. Net income is also expected to more than double from the previous year, reaching $14.95 billion. Earlier this month, reports of delays in Nvidia's Blackwell chip caused a decline in the company's shares, though Nvidia has assured that production is still scheduled to ramp up in the second half of the year as initially planned. Some analysts believe that investor concerns may be exaggerated, with minimal impact on customers. Raymond James analysts, who noted that the delay might have a "modest" impact and could even boost demand for existing chips, anticipate that "management will downplay the speculated delays."