Jamie Spencer
Nvidia (NVDA) is set to release its third-quarter earnings report today after market close, offering a crucial update on the company’s continued success in the artificial intelligence (AI) sector. As the world’s largest publicly traded company by market cap, Nvidia has seen its stock soar 192% year-to-date, significantly outperforming rivals like AMD (down 5%) and Intel (down nearly 52%).
Anticipated Q3 Results: Robust Growth in Revenue and EPS
Wall Street analysts forecast Nvidia will post earnings per share (EPS) of $0.74 on revenue of $33.2 billion, reflecting an 83% year-over-year increase on both metrics. This compares to Q3 2023, when the company recorded EPS of $0.40 on revenue of $22.1 billion.
Segment Highlights:
- Data Center Revenue: Expected to reach $29 billion, doubling the $14.5 billion reported in the same quarter last year.
- Gaming Revenue: Predicted to hit $3 billion, a 7% increase from Q3 2023.
Analysts are also projecting gross margins to reach an impressive 75%.
Focus on Q4 Guidance and AI Chip Developments
Investors will closely monitor Nvidia’s Q4 guidance, with expectations set at $37 billion in revenue. Additionally, insights on Nvidia’s next-generation Blackwell AI chips, crucial for both training and running AI applications, will be pivotal.
CEO Jensen Huang has previously stated that Blackwell production will ramp up in Q4, with demand already exceeding supply. However, reports of overheating servers have emerged, potentially delaying installation in data centers.
Tariff Concerns Under Trump Administration
Nvidia faces potential headwinds from President-elect Donald Trump’s proposed tariffs. Tariffs on Taiwan-made chips—where Nvidia’s primary manufacturer, TSMC, is based—could increase production costs, affecting margins or leading to higher prices for customers.
The broader impact of these geopolitical and trade issues will be a critical topic during Nvidia’s earnings call.
Investor Sentiment: Stellar Performance, Cautious Reactions
Despite Nvidia’s leadership in the AI boom, its stock dropped 6% following its Q2 earnings report, despite beating expectations. This reaction may reflect profit-taking or concerns about sustaining its high growth trajectory.
As Nvidia unveils its Q3 results and shares its outlook for the AI market and beyond, all eyes will be on how the company plans to navigate challenges while capitalizing on its dominant position in the sector.
