Nvidia (NVDA) is set to report third-quarter earnings after the bell on Tuesday as Wall Street anxiously awaits an update on the fundamentals behind the AI hype cycle.
The report comes after the stock closed at a record high of $504.09 per share on Monday, as artificial intelligence once again becomes the story of the moment for investors. Amid the ongoing drama Surrounding the departure of Sam Altman from ChatGPT maker OpenAI and his move to join Microsoft (MSFT).
Expectations for the chip giant remain high as the company becomes the face of the AI story of 2023.
Here’s what Wall Street expects from Nvidia this quarter, as compiled by Bloomberg, versus its performance in the same quarter last year.
he won: It is expected to reach $16.1 billion, compared to $5.93 billion in the third quarter of last year
Adjusted earnings per share: $3.36 is expected versus $0.58 in the third quarter of last year
Data center revenue: Revenues are expected to reach $12.82 billion, compared to $3.83 billion in the third quarter of last year.
Gaming revenue: $2.7 billion is expected, compared to $1.57 billion in the third quarter of last year
Investors will also focus on the company’s revenue outlook, with Wall Street anticipating the fourth-quarter forecast to reach $17.8 billion. Revenue guidance is where the company surprised investors the most in 2023.
In August, the stock hit an all-time high after Nvidia reported second-quarter results that smashed Wall Street expectations for both revenue and earnings per share, as well as guidance that beat lofty estimates. Last May, one analyst referred to the company’s forecasts as “guidance for the ages.”
“We expect NVDA to beat/beat consensus when it reports on November 21,” Vivek Arya, a research analyst at Bank of America, wrote in a note previewing the earnings release. The company remains positive on the stock, calling the valuation “compelling” and noting that seasonal trends remain favorable.
But the stock faltered for a few months after the August report as investors began to question Nvidia’s valuation, while updates regarding chip restrictions in China also challenged assumptions about the eventual size of the market the company might sell into.
in SEC filing after the announcementThe company said it does not expect a near-term impact from the new restrictions. Stifel analyst Robin Roy told Yahoo Finance Live that he expects a similar comment from Nvidia on Tuesday.
“We think there is a lot of demand globally, with the exception of China,” Roy said. “So, certainly, the big cloud providers in the U.S…. we think that will continue to be a very big opportunity for Nvidia going forward. But even outside of the U.S. and in regions like Europe, Japan, South Korea, you name it, there’s a lot going on with AI… Nvidia remains, in our view, the best way to achieve this growth.”
Nvidia has been a driver of momentum in the stock market this year as a key member of the “Magnificent Seven” stocks — along with Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN), and Meta. (META), and Tesla (TSLA).
Combined, these stocks have gained more than 70% this year through mid-November versus a 6% rise for the remaining 493 stocks in the S&P 500.
Julien Emanuel, Evercore ISI’s senior managing director, noted Sunday that “it’s still an NVDA world,” and warned investors to prepare for “post-NVDA volatility” no matter which way the stock swings.
Josh Schaeffer is a reporter for Yahoo Finance.
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