Nvidia’s Earnings Preview: Can NVDA Outperform Expectations Again?


This week is set to be eventful for earnings reports, with Nvidia (NASDAQ:NVDA), a favorite in the artificial intelligence (AI) sector, scheduled to release its earnings report tomorrow after the market closes. In 2024, NVDA has already seen a 39% increase in its stock price, riding the wave of AI enthusiasm.

Analysts are expecting Nvidia to report revenues of $20.5 billion for the fiscal fourth quarter of 2024, marking a 205% year-over-year increase. If these estimates hold true, it would be the third consecutive quarter in which Nvidia has achieved a revenue growth of over 200%.

During the fiscal third quarter earnings report, Nvidia forecasted revenues of $20 billion for the fourth quarter, with an adjusted gross margin between 75% and 76%. Analysts are also predicting a substantial increase in Nvidia’s earnings per share (EPS) for the fourth quarter, up 546% to $4.20.

Nvidia has a strong history of beating consensus estimates, surpassing earnings expectations in 19 out of the last 20 quarters, and exceeding revenue estimates for 18 consecutive quarters. However, despite these positive outcomes, the stock has only risen following 14 of these earnings reports and declined after six.

Given the strong demand for AI chips and Nvidia’s history of conservative guidance, it is likely that the company will beat earnings estimates for the fourth quarter. However, with the stock’s impressive performance over the past year, investors are expecting more than just an earnings beat.

In addition to earnings metrics, investors will be watching for Nvidia’s guidance for the first quarter of 2025, as well as commentary on the company’s revenue trajectory for the fiscal year. There is also interest in Nvidia’s inventory situation for AI chips and its response to the U.S. ban on exporting high-end chips to China.

Analysts remain bullish on Nvidia, with a “Strong Buy” rating from 34 out of 39 analysts, while the remaining five rate it as a “Moderate Buy” or “Hold.” However, some analysts are starting to express concerns about the stock’s rapid gains, with Cathie Wood of ARK Invest selling shares recently.

Overall, Nvidia’s earnings report is likely to be closely watched, with investors looking for signs to either justify the stock’s rally or indicate that it has surpassed its fundamentals.

Featured Image: Megapixl

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About the author: Stephanie Bédard-Châteauneuf has over seven years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on tech stocks, consumer stocks, market news, and personal finance. She has an MBA in finance.