Nvidia Corporation, the world’s leading GPU chip design company, is poised to announce its latest quarterly earnings after the bell on Wednesday, and market watchers are keenly focused on the results—and what they will mean for the company’s stock value—especially regarding the H200 chips and the transition toward the new Blackwell architecture.
Nvidia’s recent history of earnings has seen remarkable growth, with a staggering 265% increase reported in fiscal Q4. The performance expected to be repeated in large part due to AI-related spending by major customers like Meta Platforms, Alphabet, and Microsoft, meaning Nvidia could see year-over-year revenue growth to top 200% for a third straight period, as CNBC reported. (Meta alone raised its 2024 capital expenditures forecast to $35 billion to $40 billion to accelerate AI infrastructure investments.)
Impact on stock price: It’s all about expectations
Nvidia’s strong earnings results have recently led to significant stock price increases both before and after the earnings announcements. For the stock to rise after the report’s release today, the company will likely have to at least comfortably beat Wall Street’s estimates for the quarter and issue guidance for the next quarter that’s notably higher than analysts are projecting.
However, a slowdown in “AI stock mania” and a more cautious market could see a post-earnings selloff, even if the quarter are strong.
“We can expect to see more strong results from Nvidia, yet the bar keeps moving higher in terms of performance expectations,” says eMarketer senior analyst Jacob Bourne. “Investors want to see AI chip magic, and Nvidia might not be able to deliver that every quarter. A less-than-blockbuster report doesn’t spell doom for AI demand, it just means that there are other economic factors at play.”
As of Wednesday before the markets opened, Nvidia shares were up 98% year to date, far surpassing the S&P 500 index’s 11.9% gain. The stock’s long-term performance is even more impressive, transforming a $5,000 investment into almost $1 million over the past decade as of April 29.
We’ll have full coverage of Nvidia’s earnings after the closing bell.
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