Nvidia's Q2 Sales Expected to Double, but Investor Expectations Remain High

Nvidia sales likely doubled - even that may not impress investors

Nvidia's second-quarter revenue saw a notable rise amidst high investor expectations. The company's stock surged over 150% this year, driven by AI-related demand. However, concerns around production delays, regulatory restrictions on chip sales to China, and potential antitrust investigations could impact future growth. Investors closely monitored these developments. Nvidia is likely to report on Wednesday that its second-quarter revenue more than doubled. But investors used to its blockbuster results will be expecting even more from the artificial intelligence chip giant. A beat or a miss on Wall Street expectations could either stoke or shatter an AI rally on Thursday, a day after Nvidia reports earnings for the May-July period. The company's stock has surged more than 150% this year, adding $1.82 trillion to its market value and lifting the S&P 500 to new highs. On Monday, it was down 2.2% in afternoon trading, weighing on the index. The stock is valued at about 37 times its forward earnings, compared with an average of around 29 for the top six tech companies on the benchmark index that includes the chipmaker. Tech heavyweights, including Microsoft, which are spending heavily to build out their AI infrastructure, have been buying Nvidia's powerful graphic processing units that allow large amounts of computing quickly. These chips are difficult to replace in present-day datacenters, which has sharply boosted Nvidia's fortunes. Nvidia is expected to have recorded a year-over-year jump of about 112% in second-quarter revenue to $28.68 billion, according to LSEG data as of Aug. 23. But its adjusted gross margin likely dropped more than 3 percentage points to 75.8% from the first quarter, burdened by the cost of a production ramp-up to meet growing demand. "They're not only a benchmark for chips, but they're also a benchmark for AI as a whole," said Daniel Morgan, senior portfolio manager at Synovus Trust, which owns shares in big U.S. tech firms, including Nvidia. "If Nvidia misses, (investors are) going to sell off every company in AI." Some investors are concerned about the company's ability to meet lofty expectations and have questioned the pace of spending on AI by Nvidia's largest customers. These worries led to a 20% slump in Nvidia's stock through much of July and early August, though a recent recovery has left the stock just about 5% below its record high in June. There may be more trouble brewing around potential production delays of Nvidia's next generation Blackwell AI chips. CEO Jensen Huang said in May the chips would ship in the second quarter, but analysts have flagged design hurdles that could push the timeline. This means revenue growth might take a hit in the first half of next year, research group SemiAnalysis said. Margins could also get squeezed if Nvidia's chip contractor TSMC raises fees, a possibility that the Taiwanese firm hinted at recently. Nvidia is likely to forecast a 75% surge in third-quarter revenue to $31.69 billion, LSEG data showed, ending its five-quarter run of triple-digit growth and reflecting tough comparisons from a year ago when it surged about 206% to $18.12 billion. For the past three quarters, Nvidia's growth exceeded 200%. "We're reaching the law of large numbers here, once a company gets to a certain size, it just physically can't keep up the same growth," said Michael Schulman, chief investment officer at Running Point Capital. Some analysts said Nvidia could offset much of the hit from the delay in Blackwell chips by substituting those orders with its prior generation Hopper chips. The Hopper family of processors is not as powerful or lucrative as Blackwell, but it is sufficient for most AI-related applications. Investors will also seek updates on AI processors for the China market, where sales of its most advanced chips are barred by the U.S. government. Nvidia's China-focused processors, reportedly called H20 and less powerful than its best chips, could help the company gain business over the next few quarters in a major market where domestic champion Huawei has emerged as a competitor. There are also mounting antitrust concerns about the company's practices. US regulators are probing whether Nvidia pressured cloud providers to buy multiple products, and if it is trying to bundle its networking equipment with their sought-after AI chips.

Nvidia Q2 sales likely to double, even a slight miss may hurt shares

(Reuters) - Nvidia is likely to report on Wednesday that its second-quarter revenue more than doubled. But investors used to its blockbuster results will be expecting even more from the artificial intelligence chip giant. A beat or a miss on Wall Street expectations could either stoke or shatter an AI rally on Thursday, a day after Nvidia reports earnings for the May-July period. The company's shares have surged more than 150% this year, adding $1.82 trillion to its market value and lifting the S&P 500 to new highs. The stock is valued at about 37 times its forward earnings, compared with an average of around 29 for the top six tech companies on the benchmark index that includes the chipmaker. Tech heavyweights, including Microsoft, which are spending heavily to build out their AI infrastructure, have been buying Nvidia's powerful graphic processing units that allow large amounts of computing quickly. These chips are difficult to replace in present-day datacenters, which has sharply boosted Nvidia's fortunes. Nvidia is expected to have recorded a year-over-year jump of about 112% in second-quarter revenue to $28.68 billion, according to LSEG data as of Aug. 23. But its adjusted gross margin likely dropped more than 3 percentage points to 75.8% from the first quarter, burdened by the cost of a production ramp-up to meet growing demand. "They're not only a benchmark for chips, but they're also a benchmark for AI as a whole," said Daniel Morgan, senior portfolio manager at Synovus Trust, which owns shares in big U.S. tech firms, including Nvidia. "If Nvidia misses, (investors are) going to sell off every company in AI." Some investors are concerned about the company's ability to meet lofty expectations and have questioned the pace of spending on AI by Nvidia's largest customers. These worries led to a 20% slump in Nvidia's stock through much of July and early August, though a recent recovery has left the stock just about 5% below its record high in June. There may be more trouble brewing around potential production delays of Nvidia's next generation Blackwell AI chips. CEO Jensen Huang said in May the chips would ship in the second quarter, but analysts have flagged design hurdles that could push the timeline. This means revenue growth might take a hit in the first half of next year, research group SemiAnalysis said. Margins could also get squeezed if Nvidia's chip contractor TSMC raises fees, a possibility that the Taiwanese firm hinted at recently. Nvidia is likely to forecast a 75% surge in third-quarter revenue to $31.69 billion, LSEG data showed, ending its five-quarter run of triple-digit growth and reflecting tough comparisons from a year ago when it surged about 206% to $18.12 billion. For the past three quarters, Nvidia's growth exceeded 200%. "We're reaching the law of large numbers here, once a company gets to a certain size, it just physically can't keep up the same growth," said Michael Schulman, chief investment officer at Running Point Capital. Some analysts said Nvidia could offset much of the hit from the delay in Blackwell chips by substituting those orders with its prior generation Hopper chips. The Hopper family of processors is not as powerful or lucrative as Blackwell, but it is sufficient for most AI-related applications. Investors will also seek updates on AI processors for the China market, where sales of its most advanced chips are barred by the U.S. government. Nvidia's China-focused processors, reportedly called H20 and less powerful than its best chips, could help the company gain business over the next few quarters in a major market where domestic champion Huawei has emerged as a competitor. There are also mounting antitrust concerns about the company's practices. US regulators are probing whether Nvidia pressured cloud providers to buy multiple products, and if it is trying to bundle its networking equipment with their sought-after AI chips. (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Sayantani Ghosh)

Nvidia Q2 sales likely to double, even a slight miss may hurt shares

Nvidia is likely to report on Wednesday that its second-quarter revenue more than doubled. But investors used to its blockbuster results will be expecting even more from the artificial intelligence chip giant. A beat or a miss on Wall Street expectations could either stoke or shatter an AI rally on Thursday, a day after Nvidia reports earnings for the May-July period. The company's shares have surged more than 150% this year, adding $1.82 trillion to its market value and lifting the S&P 500 to new highs. The stock is valued at about 37 times its forward earnings, compared with an average of around 29 for the top six tech companies on the benchmark index that includes the chipmaker. Tech heavyweights, including Microsoft, which are spending heavily to build out their AI infrastructure, have been buying Nvidia's powerful graphic processing units that allow large amounts of computing quickly. These chips are difficult to replace in present-day datacenters, which has sharply boosted Nvidia's fortunes. Nvidia is expected to have recorded a year-over-year jump of about 112% in second-quarter revenue to $28.68 billion, according to LSEG data as of Aug. 23. But its adjusted gross margin likely dropped more than 3 percentage points to 75.8% from the first quarter, burdened by the cost of a production ramp-up to meet growing demand. "They're not only a benchmark for chips, but they're also a benchmark for AI as a whole," said Daniel Morgan, senior portfolio manager at Synovus Trust, which owns shares in big U.S. tech firms, including Nvidia. "If Nvidia misses, (investors are) going to sell off every company in AI." Some investors are concerned about the company's ability to meet lofty expectations and have questioned the pace of spending on AI by Nvidia's largest customers. These worries led to a 20% slump in Nvidia's stock through much of July and early August, though a recent recovery has left the stock just about 5% below its record high in June. There may be more trouble brewing around potential production delays of Nvidia's next generation Blackwell AI chips. CEO Jensen Huang said in May the chips would ship in the second quarter, but analysts have flagged design hurdles that could push the timeline. This means revenue growth might take a hit in the first half of next year, research group SemiAnalysis said. Margins could also get squeezed if Nvidia's chip contractor TSMC raises fees, a possibility that the Taiwanese firm hinted at recently. Nvidia is likely to forecast a 75% surge in third-quarter revenue to $31.69 billion, LSEG data showed, ending its five-quarter run of triple-digit growth and reflecting tough comparisons from a year ago when it surged about 206% to $18.12 billion. For the past three quarters, Nvidia's growth exceeded 200%. "We're reaching the law of large numbers here, once a company gets to a certain size, it just physically can't keep up the same growth," said Michael Schulman, chief investment officer at Running Point Capital. Some analysts said Nvidia could offset much of the hit from the delay in Blackwell chips by substituting those orders with its prior generation Hopper chips. The Hopper family of processors is not as powerful or lucrative as Blackwell, but it is sufficient for most AI-related applications. Investors will also seek updates on AI processors for the China market, where sales of its most advanced chips are barred by the U.S. government. Nvidia's China-focused processors, reportedly called H20 and less powerful than its best chips, could help the company gain business over the next few quarters in a major market where domestic champion Huawei has emerged as a competitor. There are also mounting antitrust concerns about the company's practices. US regulators are probing whether Nvidia pressured cloud providers to buy multiple products, and if it is trying to bundle its networking equipment with their sought-after AI chips. (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Sayantani Ghosh)

Nvidia sales likely doubled - even that may not impress investors

The company's stock has surged more than 150% this year, adding $1.82 trillion to its market value and lifting the S&P 500 to new highs. On Monday, it was down 2.2% in afternoon trading, weighing on the index. The stock is valued at about 37 times its forward earnings, compared with an average of around 29 for the top six tech companies on the benchmark index that includes the chipmaker. Tech heavyweights, including Microsoft, which are spending heavily to build out their AI infrastructure, have been buying Nvidia's powerful graphic processing units that allow large amounts of computing quickly. These chips are difficult to replace in present-day datacenters, which has sharply boosted Nvidia's fortunes. Nvidia is expected to have recorded a year-over-year jump of about 112% in second-quarter revenue to $28.68 billion, according to LSEG data as of Aug. 23. But its adjusted gross margin likely dropped more than 3 percentage points to 75.8% from the first quarter, burdened by the cost of a production ramp-up to meet growing demand. "They're not only a benchmark for chips, but they're also a benchmark for AI as a whole," said Daniel Morgan, senior portfolio manager at Synovus Trust, which owns shares in big U.S. tech firms, including Nvidia. "If Nvidia misses, (investors are) going to sell off every company in AI." Some investors are concerned about the company's ability to meet lofty expectations and have questioned the pace of spending on AI by Nvidia's largest customers. These worries led to a 20% slump in Nvidia's stock through much of July and early August, though a recent recovery has left the stock just about 5% below its record high in June. There may be more trouble brewing around potential production delays of Nvidia's next generation Blackwell AI chips. CEO Jensen Huang said in May the chips would ship in the second quarter, but analysts have flagged design hurdles that could push the timeline. This means revenue growth might take a hit in the first half of next year, research group SemiAnalysis said. Margins could also get squeezed if Nvidia's chip contractor TSMC raises fees, a possibility that the Taiwanese firm hinted at recently. Nvidia is likely to forecast a 75% surge in third-quarter revenue to $31.69 billion, LSEG data showed, ending its five-quarter run of triple-digit growth and reflecting tough comparisons from a year ago when it surged about 206% to $18.12 billion. For the past three quarters, Nvidia's growth exceeded 200%. "We're reaching the law of large numbers here, once a company gets to a certain size, it just physically can't keep up the same growth," said Michael Schulman, chief investment officer at Running Point Capital. Some analysts said Nvidia could offset much of the hit from the delay in Blackwell chips by substituting those orders with its prior generation Hopper chips. The Hopper family of processors is not as powerful or lucrative as Blackwell, but it is sufficient for most AI-related applications. Investors will also seek updates on AI processors for the China market, where sales of its most advanced chips are barred by the U.S. government. Nvidia's China-focused processors, reportedly called H20 and less powerful than its best chips, could help the company gain business over the next few quarters in a major market where domestic champion Huawei has emerged as a competitor. There are also mounting antitrust concerns about the company's practices. US regulators are probing whether Nvidia pressured cloud providers to buy multiple products, and if it is trying to bundle its networking equipment with their sought-after AI chips. (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Sayantani Ghosh)

Nvidia Q2 sales likely to double, even a slight miss may hurt shares

The company's shares have surged more than 150% this year, adding $1.82 trillion to its market value and lifting the S&P 500 to new highs. The stock is valued at about 37 times its forward earnings, compared with an average of around 29 for the top six tech companies on the benchmark index that includes the chipmaker. Tech heavyweights, including Microsoft, which are spending heavily to build out their AI infrastructure, have been buying Nvidia's powerful graphic processing units that allow large amounts of computing quickly. These chips are difficult to replace in present-day datacenters, which has sharply boosted Nvidia's fortunes. Nvidia is expected to have recorded a year-over-year jump of about 112% in second-quarter revenue to $28.68 billion, according to LSEG data as of Aug. 23. But its adjusted gross margin likely dropped more than 3 percentage points to 75.8% from the first quarter, burdened by the cost of a production ramp-up to meet growing demand. "They're not only a benchmark for chips, but they're also a benchmark for AI as a whole," said Daniel Morgan, senior portfolio manager at Synovus Trust, which owns shares in big U.S. tech firms, including Nvidia. "If Nvidia misses, (investors are) going to sell off every company in AI." Some investors are concerned about the company's ability to meet lofty expectations and have questioned the pace of spending on AI by Nvidia's largest customers. These worries led to a 20% slump in Nvidia's stock through much of July and early August, though a recent recovery has left the stock just about 5% below its record high in June. There may be more trouble brewing around potential production delays of Nvidia's next generation Blackwell AI chips. CEO Jensen Huang said in May the chips would ship in the second quarter, but analysts have flagged design hurdles that could push the timeline. This means revenue growth might take a hit in the first half of next year, research group SemiAnalysis said. Margins could also get squeezed if Nvidia's chip contractor TSMC raises fees, a possibility that the Taiwanese firm hinted at recently. Nvidia is likely to forecast a 75% surge in third-quarter revenue to $31.69 billion, LSEG data showed, ending its five-quarter run of triple-digit growth and reflecting tough comparisons from a year ago when it surged about 206% to $18.12 billion. For the past three quarters, Nvidia's growth exceeded 200%. "We're reaching the law of large numbers here, once a company gets to a certain size, it just physically can't keep up the same growth," said Michael Schulman, chief investment officer at Running Point Capital. Some analysts said Nvidia could offset much of the hit from the delay in Blackwell chips by substituting those orders with its prior generation Hopper chips. The Hopper family of processors is not as powerful or lucrative as Blackwell, but it is sufficient for most AI-related applications. Investors will also seek updates on AI processors for the China market, where sales of its most advanced chips are barred by the U.S. government. Nvidia's China-focused processors, reportedly called H20 and less powerful than its best chips, could help the company gain business over the next few quarters in a major market where domestic champion Huawei has emerged as a competitor. There are also mounting antitrust concerns about the company's practices. US regulators are probing whether Nvidia pressured cloud providers to buy multiple products, and if it is trying to bundle its networking equipment with their sought-after AI chips. (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Sayantani Ghosh)

Nvidia Q2 Sales Likely to Double, Even a Slight Miss May Hurt Shares

(Reuters) - Nvidia is likely to report on Wednesday that its second-quarter revenue more than doubled. But investors used to its blockbuster results will be expecting even more from the artificial intelligence chip giant. A beat or a miss on Wall Street expectations could either stoke or shatter an AI rally on Thursday, a day after Nvidia reports earnings for the May-July period. The company's shares have surged more than 150% this year, adding $1.82 trillion to its market value and lifting the S&P 500 to new highs. The stock is valued at about 37 times its forward earnings, compared with an average of around 29 for the top six tech companies on the benchmark index that includes the chipmaker. Tech heavyweights, including Microsoft, which are spending heavily to build out their AI infrastructure, have been buying Nvidia's powerful graphic processing units that allow large amounts of computing quickly. These chips are difficult to replace in present-day datacenters, which has sharply boosted Nvidia's fortunes. Nvidia is expected to have recorded a year-over-year jump of about 112% in second-quarter revenue to $28.68 billion, according to LSEG data as of Aug. 23. But its adjusted gross margin likely dropped more than 3 percentage points to 75.8% from the first quarter, burdened by the cost of a production ramp-up to meet growing demand. "They're not only a benchmark for chips, but they're also a benchmark for AI as a whole," said Daniel Morgan, senior portfolio manager at Synovus Trust, which owns shares in big U.S. tech firms, including Nvidia. "If Nvidia misses, (investors are) going to sell off every company in AI." Some investors are concerned about the company's ability to meet lofty expectations and have questioned the pace of spending on AI by Nvidia's largest customers. These worries led to a 20% slump in Nvidia's stock through much of July and early August, though a recent recovery has left the stock just about 5% below its record high in June. There may be more trouble brewing around potential production delays of Nvidia's next generation Blackwell AI chips. CEO Jensen Huang said in May the chips would ship in the second quarter, but analysts have flagged design hurdles that could push the timeline. This means revenue growth might take a hit in the first half of next year, research group SemiAnalysis said. Margins could also get squeezed if Nvidia's chip contractor TSMC raises fees, a possibility that the Taiwanese firm hinted at recently. Nvidia is likely to forecast a 75% surge in third-quarter revenue to $31.69 billion, LSEG data showed, ending its five-quarter run of triple-digit growth and reflecting tough comparisons from a year ago when it surged about 206% to $18.12 billion. For the past three quarters, Nvidia's growth exceeded 200%. "We're reaching the law of large numbers here, once a company gets to a certain size, it just physically can't keep up the same growth," said Michael Schulman, chief investment officer at Running Point Capital. Some analysts said Nvidia could offset much of the hit from the delay in Blackwell chips by substituting those orders with its prior generation Hopper chips. The Hopper family of processors is not as powerful or lucrative as Blackwell, but it is sufficient for most AI-related applications. Investors will also seek updates on AI processors for the China market, where sales of its most advanced chips are barred by the U.S. government. Nvidia's China-focused processors, reportedly called H20 and less powerful than its best chips, could help the company gain business over the next few quarters in a major market where domestic champion Huawei has emerged as a competitor. There are also mounting antitrust concerns about the company's practices. US regulators are probing whether Nvidia pressured cloud providers to buy multiple products, and if it is trying to bundle its networking equipment with their sought-after AI chips. (Reporting by Arsheeya Bajwa in Bengaluru; Editing by Sayantani Ghosh)

Nvidia Q2 sales likely to double, even a slight miss may hurt shares

Nvidia is likely to report on Wednesday that its second-quarter revenue more than doubled. But investors used to its blockbuster results will be expecting even more from the artificial intelligence chip giant. A beat or a miss on Wall Street expectations could either stoke or shatter an AI rally on Thursday, a day after Nvidia reports earnings for the May-July period. The company's shares have surged more than 150% this year, adding $1.82 trillion to its market value and lifting the S&P 500 to new highs. The stock is valued at about 37 times its forward earnings, compared with an average of around 29 for the top six tech companies on the benchmark index that includes the chipmaker. (For top technology news of the day, subscribe to our tech newsletter Today's Cache) Tech heavyweights, including Microsoft, which are spending heavily to build out their AI infrastructure, have been buying Nvidia's powerful graphic processing units that allow large amounts of computing quickly. These chips are difficult to replace in present-day datacenters, which has sharply boosted Nvidia's fortunes. Nvidia is expected to have recorded a year-over-year jump of about 112% in second-quarter revenue to $28.68 billion, according to LSEG data as of Aug. 23. But its adjusted gross margin likely dropped more than 3 percentage points to 75.8% from the first quarter, burdened by the cost of a production ramp-up to meet growing demand. "They're not only a benchmark for chips, but they're also a benchmark for AI as a whole," said Daniel Morgan, senior portfolio manager at Synovus Trust, which owns shares in big U.S. tech firms, including Nvidia. "If Nvidia misses, (investors are) going to sell off every company in AI." Some investors are concerned about the company's ability to meet lofty expectations and have questioned the pace of spending on AI by Nvidia's largest customers. These worries led to a 20% slump in Nvidia's stock through much of July and early August, though a recent recovery has left the stock just about 5% below its record high in June. There may be more trouble brewing around potential production delays of Nvidia's next generation Blackwell AI chips. CEO Jensen Huang said in May the chips would ship in the second quarter, but analysts have flagged design hurdles that could push the timeline. This means revenue growth might take a hit in the first half of next year, research group SemiAnalysis said. Margins could also get squeezed if Nvidia's chip contractor TSMC raises fees, a possibility that the Taiwanese firm hinted at recently. Nvidia is likely to forecast a 75% surge in third-quarter revenue to $31.69 billion, LSEG data showed, ending its five-quarter run of triple-digit growth and reflecting tough comparisons from a year ago when it surged about 206% to $18.12 billion. For the past three quarters, Nvidia's growth exceeded 200%. "We're reaching the law of large numbers here, once a company gets to a certain size, it just physically can't keep up the same growth," said Michael Schulman, chief investment officer at Running Point Capital. Some analysts said Nvidia could offset much of the hit from the delay in Blackwell chips by substituting those orders with its prior generation Hopper chips. The Hopper family of processors is not as powerful or lucrative as Blackwell, but it is sufficient for most AI-related applications. Investors will also seek updates on AI processors for the China market, where sales of its most advanced chips are barred by the U.S. government. Nvidia's China-focused processors, reportedly called H20 and less powerful than its best chips, could help the company gain business over the next few quarters in a major market where domestic champion Huawei has emerged as a competitor. There are also mounting antitrust concerns about the company's practices. US regulators are probing whether Nvidia pressured cloud providers to buy multiple products, and if it is trying to bundle its networking equipment with their sought-after AI chips. Read Comments

Nvidia results to show Wall Street how AI chip boom is faring

Michael Acton in San Francisco and Nicholas Megaw in New York Nvidia is expected to say on Wednesday that its quarterly sales have more than doubled, even as year-on-year growth slows, as Wall Street braces for what has become one of the world's most closely watched earnings reports. Analysts predict the US chipmaker will report $28.7bn in revenue for the quarter, which would represent an increase of more than 100 per cent from the year before. Still, that would represent a significant slowdown from the previous quarter, when revenue growth reached a blistering 262 per cent, fuelled by an insatiable demand for its chips that power a wave of AI innovation. Investors will be watching in particular for how much a delay to its next-generation Blackwell chips could hinder its phenomenal growth story. Nvidia has fast become a bellwether for investors watching for signs that a months-long AI spending boom may slow. That has created the potential for market volatility around the announcement from a stock that has driven more than a quarter of the year-to-date gains in the S&P 500. There are signs some investors are already readying themselves for broader reverberations from Wednesday's release. Options markets were last week pricing in a 1.3 per cent swing in the S&P 500 for the first day of trading after Nvidia published its results, according to data from Citi -- the same expected volatility as next month's Federal Reserve meeting. Options were pricing in a swing of up to 10 per cent in either direction for Nvidia's stock. Nvidia's shares have climbed more than 160 per cent this year, but its performance has been more volatile in recent weeks as investors have reassessed some of their bets on AI-linked stocks. IT and consumer discretionary stocks -- which include tech giants Amazon and Tesla -- have been two of the worst-performing sectors in the S&P 500 in the third quarter. At its lowest point during a recent market sell-off, Nvidia was 35 per cent below its all-time high. By last Friday it had regained the bulk of the losses but was still 8 per cent below its record. "I think there's been a genuine shift and sobering up" on some of the more extreme AI bets, said Dec Mullarkey, managing director at SLC Management. "If they disappoint in some way, that could lead to a fairly significant correction and spillover." Despite these concerns, there has been little sign that the AI spending spree by the likes of Google, Microsoft, Meta and Amazon is abating. Accordingly, many analysts are anticipating yet another strong quarter for Nvidia. But there are some potential hurdles. The rollout of Nvidia's next generation of GPUs, known as Blackwell, has been delayed by manufacturing complications with its partner TSMC. Nvidia chief executive Jensen Huang said on the company's previous earnings call in May that he expected Blackwell to contribute "a lot" of revenue this year. Citi analysts said last week investors would be focused on demand for Nvidia's current generation of Hopper chips, which could offset any impact from delays to Blackwell. HSBC analysts said they do not foresee "any material downside" risk to the company's earnings in 2025 and 2026 as a result of the delay to the Blackwell chip. They were also bullish on the upcoming results, saying they expected revenue to once again beat expectations and hit $30bn. Earnings from Big Tech companies engaged in the race for AI dominance have given a glimpse at the spending spree of which Nvidia has been a beneficiary. In its quarterly results in July, Google reported another increase in its capital expenditure, rising to $13bn for the quarter to the end of June, reflecting in part its ongoing spending on Nvidia's chips. Meta, Microsoft and Amazon similarly reported that they plan to continue heavy spending on AI. The continued emphasis on spending with little guidance on when it would translate into earnings and productivity growth spooked some investors who were already concerned that valuations among large tech groups had become stretched. Spending by a small group of Big Tech AI "hyperscalers" make up close to half of Nvidia's data centre business revenue, which has fast become the company's main earner. "The big concern everyone is going to have is the Blackwell delay," G Dan Hutcheson at TechInsights told the Financial Times. "The other factor is when people begin to look at the world and say: 'are [the hyperscalers] able to monetise this?' Because at some point they have to rationalise what they are doing." "My sense is that Nvidia investors are going to stay the course, especially with the economy doing well and expectations of a drop in business rates at macro level," Hutcheson added.

Nvidia has lots of questions to answer in this week's earnings call on product delays, competition, and China

Three months later, as the sheer size of AI spending across the tech giants has sunk in and the market has seen its first major semiconductor sell-off since ChatGPT launched, Nvidia analysts and investors have an entirely new set of facts to analyze. Investors will likely ask if and when demand for Nvidia's much sought-after GPUs will slow down, not if customers are buying them faster than they can use them. Efforts by other companies to build competitive AI chips still haven't reached more than a simmer, and the much-lauded rollout of Nvidia's next-generation chip Blackwell is reportedly delayed. Nvidia's stock price has also been on a roller coaster since May, with shares tumbling in July after concerns over potential tighter trade restrictions with China. Reports from earlier in August that Nvidia's next generation of chips would be delayed sent a ripple of questions through the AI and semiconductor worlds. While analysts weren't too worried, some questioned whether a delay in the rollout would trouble supply chain partners that have reserved capacity to satisfy Nvidia's manufacturing ramp-up. Dylan Patel, lead analyst at SemiAnalysis, previously told Business Insider something similar. While the Blackwell chips are delayed, Morgan Stanley analysts wrote in a note published Monday that Nvidia will likely say that it's still "in line for volume this quarter" and that it will ramp up this year. The analysts also wrote that revenue from existing products, specifically the H200 and H20 AI chips, could offset any delayed revenue from Blackwell. "The biggest doubt hanging over NVDA stock, is whether sales growth will slow later this year ahead of the shipment of the new Blackwell chips, which is scheduled to ship in mid-October. This lag and difficult comparisons cast some shadows over the current lofty valuation," Dan Morgan, senior portfolio manager at Synovus, wrote in a note to investors. Wednesday could be the first time Nvidia speaks about the delay. Nvidia has big concerns coming up in the longer term. Competitors are coming for its crown, and the AI computing market is evolving as it matures. Continuing demand for Nvidia's products and services is expected but far from assured. Nvidia is the last to report its second-quarter earnings within the AI-focused cohort of tech companies, and it's the North Star for AI believers. Amazon, Google, Meta, and Microsoft are on track to spend $185 billion on AI before the end of the year, according to a JPMorgan analysis. Most of that spending will go toward computing resources, a majority of which are Nvidia GPUs. This quarter, CEOs made clear that they won't wait for AI profits to keep spending on AI infrastructure. Meta spent $8.5 billion in the second quarter on computing infrastructure for AI and the metaverse. It plans to spend between $37 billion to $40 billion this year, although CEO Mark Zuckerberg told investors in July not to expect immediate payback. "Before we're really talking about monetization of any of those things by themselves, I don't think anyone should be surprised. I would say that would be years," Zuckerberg said in last month's earnings call. Amazon has expanded its own chip development to reduce its reliance on Nvidia and announced on its last earnings call that it will roll out updated versions of its Trainium and Inferentia chips. Nvidia's chips are still a must for the most complex AI computing jobs, as Amazon still purchases chips from Nvidia. Yet, the cloud and e-commerce giant has repeatedly said that developing its in-house chips allows it to offer customers a lower price for cloud computing. Google also uses its own chips for some AI computing and spent billions to build and expand its data centers. Nvidia's main rival, AMD, beat earnings expectations last quarter. AMD CEO Lisa Su told analysts on the July 30 earnings call that the excess came from its AI chip sales. While global demand for GPUs is high, Synovus's Morgan said Nvidia can afford to absorb some shifting sands in the Chinese market, although that may not always be the case. A new administration in the White House (of either major party) could also throw sand in the gears. Nvidia's H20 chip, specifically designed to comply with US expert rules, is a "meaningful contributor" to its overall performance, according to Morgan Stanley. Chinese companies have been using resellers to get their hands on Nvidia's chips, and Nvidia will reportedly release a new flagship chip that complies with export controls specifically for the Chinese market. Any further crackdown on American AI technology reaching the Chinese market could impact Nvidia. Whether it's a possible slowdown in demand, execution issues, pressure from competitors, or further restrictions on the Chinese market -- none of the pressing questions analysts will likely hurl at Nvidia CEO Jensen Huang Wednesday will impact the company until next year, but these big questions will still loom.

Nvidia's Revenue Expected To Soar, But Challenges Loom

Nvidia is on track to reveal a dramatic increase in its second-quarter earnings, with revenue anticipated to more than double, potentially hitting $28.68 billion. This surge has been driven by the soaring demand for Nvidia's AI chips, which are integral to the development of advanced computing infrastructure. As a result, the company's stock has skyrocketed by over 150% this year, adding a staggering $1.82 trillion to its market value and boosting the S&P 500 index, as reported by Reuters. However, despite these impressive figures, there's a sense of unease among investors. Even a slight miss in meeting these high expectations could negatively impact Nvidia's stock, which is currently valued at about 37 times its forward earnings -- much higher than the average for other top tech firms. Looking ahead, Nvidia faces significant challenges. Reports indicate potential delays in the production of its next-generation Blackwell AI chips, which could slow revenue growth in the early part of next year. These delays stem from design issues that might push back the release schedule. Additionally, the company's profit margins could be squeezed if its chip manufacturer, TSMC, raises production costs, something the Taiwanese company has hinted at recently. Nvidia is also navigating hurdles in the Chinese market. Due to U.S. government restrictions, Nvidia is unable to sell its most advanced AI chips directly in China. However, Chinese AI developers have reportedly been finding ways around this by accessing Nvidia's powerful H100 chips through overseas brokers, who use methods to hide their identities. This workaround was highlighted in a report by The Wall Street Journal. Despite these issues, the company is still expected to project strong third-quarter revenue of $31.69 billion, though this growth is expected to be slower compared to previous quarters.

Nvidia has become world's 'most important stock,' adding pressure to upcoming earnings report

Nvidia CEO Jensen Huang makes a speech at an event at COMPUTEX forum in Taipei, Taiwan June 4, 2024. For Nvidia investors, the past two years have been a joyride. But recently they've been on more of a roller coaster. As the primary beneficiary of the artificial intelligence boom, Nvidia has seen its market cap expand by about nine-fold since the end of 2022. But after reaching a record in June and briefly becoming the world's most valuable public company, Nvidia proceeded to lose almost 30% of its value over the next seven weeks, shedding roughly $800 billion in market cap. Now, it's in the midst of a rally that's pushed the stock within about 7% of its all-time high. With the chipmaker set to report quarterly results on Wednesday, the stock's volatility is top of mind for Wall Street. Any indication that AI demand is waning or that a leading cloud customer is modestly tightening its belt potentially translates into significant revenue slippage. "It's the most important stock in the world right now," EMJ Capital's Eric Jackson told CNBC's "Closing Bell" last week. "If they lay an egg, it would be a major problem for the whole market. I think they're going to surprise to the upside." Nvidia's report comes weeks after its mega-cap tech peers got through earnings. The company's name was sprinkled throughout those analyst calls, as Microsoft, Alphabet, Meta, Amazon and Tesla all spend heavily on Nvidia's graphics processing units (GPUs) to train AI models and run massive workloads.

Nvidia earnings are coming this week. Here's what to expect

The artificial intelligence boom has propelled chipmaker Nvidia (NVDA) to record-breaking highs -- and analysts are expecting its revenue to more than double when it reports second-quarter results this week. Nvidia (NVDA) is expected to report revenue of $28.7 billion for the quarter ending on July 30 -- more than double its revenue of $13.5 billion a year ago, according to analysts' estimates compiled by FactSet. The chipmaker will report second-quarter earnings for fiscal 2025 on August 28. Analysts are also expecting net income of $15.02 billion, and earnings per share of $0.65. The company's shares have jumped over 160% so far this year, but were down around 2.3% during midday trading on Monday. After its first-quarter earnings report, earlier this year, Nvidia initiated a 10-for-1 stock split. In anticipation of the chipmaker's earnings report, researchers at Wedbush led by Dan Ives called Nvidia "the foundation for the AI Revolution," and said the firm is expecting another "drop the mic performance" from the company in a note last week. "We believe the most important week for the stock market this year and potentially in years for the Street will be next week as the Godfather of AI Jensen and Nvidia (NVDA) have earnings on deck," Ives wrote, referring to Nvidia chief executive Jensen Huang. Nvidia and other AI firms' hard and fast rise has led some investors to fear an AI bubble, but Ives said it's more likely "a 1995 (almost 1996) start of the Internet Moment and not a 1999 Tech Bubble-like moment." Earlier this month, Nvidia's shares fell, dragging down the Nasdaq, after a report that its latest Blackwell AI platform is delayed due to design flaws, possibly pushing deliveries back by at least three months. During Nvidia's first-quarter earnings call, Huang said Blackwell would start shipping in the second quarter, ramp up in the third quarter, and be with customers in the fourth quarter. He added that the chipmaker would see revenue from Blackwell this year. The chipmaker beat Wall Street's expectations in its first-quarter earnings, reporting revenue of $26 billion -- a 262% increase from the previous year. Huang announced that Nvidia already has another chip coming after Blackwell, and added that it is "on a one-year rhythm," for developing new chips.

Prediction: Nvidia Will Crush Wall Street Expectations on Aug. 28 -- but There's a Catch for the AI Stock | The Motley Fool

Nvidia's upcoming earnings report is poised to be one of this year's most important stock market events, and anticipation is sky-high. Nvidia (NVDA -1.84%) has been 2024's most influential stock. Rising artificial intelligence (AI) demand spurred enormous sales and earnings growth for the company, and the business momentum translated to incredible valuation gains. The processing leader's share price is up 161% across this year's trading alone, and its incredible performance has been a bullish catalyst for the market at large and other individual players in the AI space. Now, Nvidia stock is on the verge of its next big test. After the market closes on Wednesday, Aug. 28, the company will publish results for the second quarter of its 2025 fiscal year (which ended July 28). Management will also host a conference call to give investors further insight into the business and its outlook. The earnings release will likely be one of this year's most important stock market events, and anticipation on Wall Street is running high. There's plenty of speculation on whether Nvidia will beat earnings expectations, and I'm predicting that the AI giant will comfortably beat most targets. But buckle up, because this one could get wild. In its fiscal 2025 first quarter update, Nvidia management guided for roughly $28 billion in sales in the second quarter. If the company hits that target, it would mean delivering annual sales growth of 107%. Management also expects Nvidia's gross margin to grow to 74.8%. Those numbers are nothing to sneeze at. Wall Street is even more optimistic, with the average analyst estimate calling for the AI frontrunner to deliver sales of $28.6 billion in the period. Thus far, the company has been building an impressive streak of performance beats. Take a look at the table below, which tracks Nvidia's revenue against Wall Street's expectations over the company's last four reported quarters. Data sources: Nvidia and CNBC. With the company posting fantastic margins, sales beats have also meant that the company's earnings have crushed Wall Street's expectations. Across the last year, the company's quarterly non-GAAP (adjusted) earnings beat the midpoint Wall Street target by an average of 17.3%. There's a very good chance that Nvidia will manage to beat its own targets and the average Wall Street estimates with its upcoming quarterly report. Here's why. With its last quarterly report, Microsoft announced capital expenditures (capex) of $19 billion -- with nearly all of the spending going to improving the company's cloud and AI infrastructure. Capex was up 35% from the previous quarter, and management also announced that spending is poised to continue climbing over the next year. Microsoft is widely believed to be Nvidia's largest customer, and increased spending on AI infrastructure is a clear bullish indicator. The software giant wasn't the only one to deliver encouraging capex news recently. Meta Platforms, another big Nvidia customer, also raised its capital-spending guidance range with the second-quarter results it published at the end of last month. In general, the sentiment among many leading tech companies appears to be that it's better to invest heavily in artificial intelligence right now than to risk being left behind or playing catch-up with competitors. Along with promising capex data from technology giants, that bodes well for Nvidia -- and I think the company will beat top- and bottom-line expectations in Q2. But there's a catch. While the average Wall Street target calls for Nvidia to report revenue of $28.6 billion for the second quarter, some analysts have set the target significantly higher. For example, HSBC expects the business to report $30 billion in revenue for the period. Beating the average Wall Street target is often enough to trigger bullish valuation momentum for a company, but that isn't always the case. Hot stocks in particular are often held to higher standards -- with investors looking for the business to deliver results that match or exceed elevated expectations. It's also worth noting that Wall Street analysts have gotten more accurate in modeling the company's performance over the last year of reporting, with Nvidia's quarterly sales beat going from 20.4% in last year's second quarter to 5.6% in this year's first quarter. Even if Nvidia manages to far exceed the average Wall Street targets, there are other catalysts that could lead to volatile trading after earnings. Investors will also have the company's guidance for the current quarter and future roadmap under the microscope, and reports have emerged that the AI leader may be delaying the release of its next-generation Blackwell processors. Depending on what Blackwell news Nvidia has to share, the stock could see big moves in either direction. So even with signs that the AI luminary will deliver strong Q2 results, investors should understand the stage could be set for post-earnings valuation volatility. Rather than trying to time short-term buying and selling moves around what the company's share price will do soon after earnings, it makes more sense to approach an investment in Nvidia with the company's long-term outlook in mind. Things generally continue to look quite promising on that front.

NVIDIA's Q2 Earnings Could Be Its Last With 100%+ Percentage Revenue Growth

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. With its earnings due after the closing bell tomorrow, NVIDIA's second quarter could be its last in the current semiconductor up cycle to deliver triple digit earnings growth, as per data from LSEG. NVIDIA, whose fiscal year ends in January, is due to report its earnings for the second quarter of the year ending in January 2025. Heading into the release, the market is concerned about a purported delay of NVIDIA's latest Blackwell AI GPUs, with speculation suggesting that this impact will be minimal and revenue will be pushed forward by a quarter at the very worst. NVIDIA's earnings for the second quarter of fiscal 2024, i.e., the year ago quarter for tomorrow's results, was the first in the current cycle in which the firm had marked a triple digit percentage revenue growth. Back then, the firm had brought in $13.5 billion in revenue, which marked a 101% growth over Q2 2023's $6.7 billion in revenue. AI GPU sales in the industry were in their early stages, and NVIDIA was also recovering from the post pandemic crunch in consumer GPU sales. Now, as per data from the London Stock Exchange Group (LSEG), NVIDIA should earn $28.68 billion during its Q2 2025. When compared to the year ago quarter's $13.5 billion in revenue, this should mark 112.5% in annual growth. This growth comes as big ticket technology names the likes of Microsoft, Facebook parent Meta and Google parent Alphabet continue to fork out billions of dollars on artificial intelligence infrastructure in order to out compete each other. After their second quarter earnings report. earlier this year, big tech firms committed to a cumulative $210 billion in capital expenditure, while Wall Street kept a watchful eye on the profits that they are earning from the new technology. Crucially, analysts also expect that NVIDIA will guide $31.69 billion in revenue for its third quarter, for a 74.89% annual growth. If the firm meets this guidance, then it will be the first time since last year that NVIDIA's annual revenue growth sits below 100% or higher. During fiscal Q3 2024, the firm earned $18.1 billion in revenue, which marked a strong acceleration over the second quarter results. After the 101% revenue growth in the second quarter, the third quarter put NVIDIA on steroids, as the $18.1 billion figure meant it had grown its sales by 206% over the year-ago quarter. Even though they are among the final few quarterly results on Wall Street, NVIDIA's financials, due to feverish attention surrounding artificial intelligence, have set the tone for investing. With investors currently basking in the aftermath of Fed chair Jerome Powell's confirmation of an interest rate cut cycle, a beat over the revenue estimates will signal to Wall Street that at least the demand for artificial intelligence hardware is persisting in the industry.

The AI bubble has quietly inflated again. But a huge test looms

The stock's stellar run - up 750 per cent since the start of 2023 - has been well documented. But what's gained less attention is the quiet rally in Nvidia over the past few weeks: after dropping sharply in the first week of August, the stock has surged 31 per cent since August 7 and is set to retest its all-time highs. That tells you all you need to know about the investor sentiment: after a brief period of doubt about whether the huge capital expenditure on AI could continue if Nvidia's big customers (including Microsoft, Amazon, Alphabet and Meta Platforms, which combined account for 40 per cent of Nvidia's revenues) were unable to monetise the technology, the bubble has quietly reflated again. The numbers that Nvidia chief executive Jensen Huang delivers for the June quarter on Wednesday night will look impressive, with revenue and earnings set to double from a year ago. But with Nvidia and its four big customers trading on rich multiples and dominating Wall Street's key indices in a way we've never seen before - they account for a staggering 27 per cent of the S&P 500's market capitalisation - there is an awful lot riding on how Huang describes the outlook for growth from here. US tech analyst Dan Ives of Wedbush, who is prone to more than a touch of hyperbole, declared it "the most important week for the stock market this year and potentially in years". Ives is confident Nvidia will deliver and describes its chips as "the new oil and gold" in a world where $US1 trillion ($1.5 trillion) of capital expenditure will pour into AI in the next few years. Ives' view is that the growth in the cloud businesses of Microsoft, Amazon and Alphabet, and the initial artificial intelligence data points those companies shared, has shown that enterprise AI demand is booming and unlikely to stop. He argues small US tech companies including AMD, ServiceNow and Palantir have further validated the path to what Ives claims is a fourth industrial revolution. But Ives acknowledges the scepticism in the market hasn't been flushed out, and Nvidia is "the only game in town" for both bears and bulls. "While the Tokyo Black Monday growth scare a few weeks ago was a historical blip on the radar, the bulls need to see enterprise demand on AI carry the torch to move this market higher led by tech - and it all starts with Nvidia next week." If Jensen delivers a big June quarter result and a robust outlook for the rest of calendar 2025, then Ives sees the potential for Wall Street to rally into the end of the year, supported by US Federal Reserve rate cuts now all but locked in. "The stage is set for tech stocks to move higher into year-end and 2025 in our opinion as the Fed gets in position to start its rate-cutting cycle, macro soft landing remains the path, and tech spending on AI remains a generational spending cycle just starting to hit the shores of the tech sector." But there are a few reasons for caution, both specifically at Nvidia and in the broader environment. Investors are likely to want reassurance from Huang about the swirling rumours about delays to Nvidia's new Blackwell chip, announced earlier this year. And they're likely to seek more information about how customers are keeping up with Nvidia's break-neck development cycle, and the emergence of any competitive pressures. More broadly, there's the lingering question of whether impatience about the returns Microsoft, Amazon, Alphabet and Meta Platforms are earning from their big AI bets could grow. As this column has argued, generative AI has yet to deliver much more than souped-up personal assistants and tools to help software developers write the most basic code a bit faster. And some experiments, such as Microsoft's much-heralded attempt to challenge Google's search dominance with an AI-powered version of its Bing search engine, have largely fizzled out. If the US economy stalls and corporate profits are under pressure, will the tech giants keep spending on Nvidia chips at the same rate if they're not getting a return on their AI investments? These are big debates that will take years to play out. But investors need to remember the starting point. AI stocks like Nvidia are priced for perfection and dominate global indices, so even the slightest disappointment may have big repercussions.

Should You Buy Nvidia Stock Before Second-Quarter Earnings? | The Motley Fool

Nvidia's (NVDA -1.63%) journey from a niche gaming hardware company to a $3.18 trillion tech behemoth offers a great example of the potential that comes with long-term investing. A $1,000 investment made a decade ago has grown to be worth $270,790. But as this stock's ongoing rally (largely driven by the artificial intelligence (AI) trend) gets long in the tooth, investors may want to pay closer attention to its results for clues about what the coming years may bring. With each passing quarter, more investors are asking: Is Nvidia stock still a buy, or is it time to take profits before a disappointing earnings report pops a potential price bubble? Let's dig deeper. During earnings season, retail investors often get confused when their stocks drop despite increasing revenue and profits. The price fluctuations are usually tied more to stock valuations tied to projected future performance, not current performance. So, if a company doesn't continuously exceed expectations, its shares can drop even after what would otherwise be considered good business results. This could become a major challenge for Nvidia as it seeks to one-up already spectacular results from prior year periods. In the second quarter of fiscal 2024 (which is mostly associated with the calendar year 2023), Nvidia's revenue grew 101% year over year to $13.51 billion. That figure pales in comparison to analysts' expectation of $28.7 billion in revenue in Q2 of fiscal 2025. Meeting or exceeding these lofty market expectations will be the key for Nvidia to maintain its valuation of 40 times sales compared to the S&P 500 average of just under 3. Part of the reason why Nvidia can justify such a high top-line valuation is its gross margins, which compare its products' sales prices to their direct production costs. Last quarter, this number stood at an eye-watering 78.4%, helped by industry-leading AI graphics processing units (GPUs) like the h100, which sell for around $25,000 per unit. For context, Microsoft has a lower gross margin of 70% despite primarily selling digital software-as-a-service instead of physical products. Nvidia may be taking advantage of chip scarcity and its competitive advantages, such as its GPU-associated software platform CUDA (which programmers are more familiar with) to price gouge consumers. And investors should keep a close eye on gross margins in the second quarter and beyond. So far, competition from rivals like Advanced Micro Devices hasn't led to notable margin pressure. But Nvidia's top supplier Taiwan Semiconductor Manufacturing has floated the idea of raising its production prices to get a larger slice of the pie. Capitalism tends to erode excess margins, and Nvidia's windfall probably won't last forever. Earlier this month, higher-than-expected unemployment numbers set off alarm bells on Wall Street. And according to analysts at J.P. Morgan, the probability of a U.S. recession stands at 35% before the end of the year. Investors should look for signs of these trends in Nvidia's earnings. Nvidia will be sensitive to changes in macroeconomic sentiment because its high-end AI GPUs are arguably "luxury" technology products that are not essential for the core operations of many of its clients. Consumer-facing large language models (LLMs) are generally not profitable, making them likely to be among the first segments cut if the economy weakens. While AI could become one of the most transformational tech megatrends in years, it bears an uncanny resemblance to the dot.com bubble in the early 2000s. The industry could quickly unravel if companies decide it is no longer worthwhile to invest so much in a largely unproven opportunity. If the last two years of earnings are anything to go by, betting against Nvidia is typically a bad idea. The chipmaker has continuously proven its naysayers wrong with incredible results quarter after quarter. And the second quarter of fiscal 2025 might not be an exception. That said, investors should also be aware that the risks of holding Nvidia are beginning to rise -- possibly more than the potential rewards. The company will face increasingly challenging comps as it seeks to outdo already fantastic earnings. And its unusually high margins may eventually come under pressure from suppliers and competition. The rising likelihood of a near-term recession is probably the biggest possible headwind. And it may be a good idea to take profits before the macroeconomic environment changes.