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Investors are awaiting Nvidia’s second-quarter earnings report after the market close on Wednesday.
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The AI chip company has set high expectations after its May revenue guidance exceeded Wall Street estimates.
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Here’s what Wall Street expects from Nvidia’s upcoming earnings report.
Nvidia will be closely watched by investors this week as the company gets ready to release its second-quarter earnings report after the market close on Wednesday.
The chipmaker blew away analyst expectations in May when it issued second-quarter revenue guidance of $11 billion, which exceeded Wall Street estimates by a massive $4 billion.
The company, which manufactures and sells GPUs that help power AI chatbots like ChatGPT, has seen soaring demand for its products over the past few months, and it commands a decisive lead in the AI chip market.
“We’re using a lot of Nvidia hardware. We’ll actually take it as fast as they’ll deliver it to us. Frankly, if they could deliver us enough GPUs, we might not need Dojo. But they can’t. They’ve got so many customers,” Tesla CEO Elon Musk said during Tesla’s second-quarter earnings call in July.
The boom in Nvidia’s AI-focused business has sent its stock price soaring more than 200% year to date, giving it a $1.1 trillion market valuation.
Most of Wall Street expects Nvidia to continue impressing investors with solid second-quarter results, and even better-than-expected guidance for the second half of the year. The average EPS estimate for the quarter is $2.07, and the average revenue estimate is $11.2 billion, according to data from YahooFinance.
Here’s what the Wall Street analysts are saying about Nvidia’s upcoming earnings report.
Barclays: ‘Nvidia remains our preferred exposure to AI.’
“Our backend Asia checks show Nvidia backend can support up to $15 billion in H100/A100 revenue in Q3 and more in Q4, leaving potential for more substantial beats and raises over the next few quarters,” Barclays said in a note late last month, referring to Nvidia’s GPUs
“The consensus total Data Center estimate (including Mellanox) for Q3 is just $8.5 billion… AMD looks positioned within the market as the potential first viable competitor, but we likely won’t even see initial signs of success until next year. In the meantime, Nvidia will continue to take the lion’s share of the economics from the AI boom.”
Barclays rates Nvidia “Overweight” with a $600 price target.
Bank of America: ‘From shock-and-awe to consolidate-and-advance.’
Nvidia is a “top sector pick ahead of its F2Q earnings call given its dominant position and multi-year runway in transforming the $1+ trillion in traditional global data centers to AI/accelerated compute. After last quarter’s shock-and-awe report, we expect the sentiment to be bit more measured. Demand isn’t the issue, its supply (packaging, memory) and importantly the pace with which US cloud service providers are able to set up genAI compute instances,” Bank of America said in a note earlier this month.
“Nvidia is unlikely to guide beyond a quarter, but listen for management commentary around continued sales acceleration/early in ramp etc. Post-earnings reaction could see some near-term stock consolidation following the 200%+ move up YTD (vs SOX up 46%),” BofA said.
Bank of America rates Nvidia at “Buy” with a $550 price target.
Goldman Sachs: ‘Significant runway ahead.’
“We continue to see significant runway ahead for the company based on its robust competitive position in what is a rapidly growing (yet nascent) AI semiconductor market. With our forward estimates sitting above Street consensus, we envision positive EPS revisions supporting sustained stock price outperformance through the balance of the calendar year,” Goldman Sachs said in a note last month.
Goldman Sachs rates Nvidia at “Buy” with a $495 price target.
Read the original article on Business Insider