Nvidia Earnings Preview: Can NVDA Continue to Exceed Expectations?

Nvidia Stock

Investors brace for a flurry of earnings reports as the week unfolds, including one from the AI powerhouse Nvidia (NASDAQ:NVDA). Set to unveil its financial performance tomorrow after the market closes, Nvidia enters the spotlight amidst a year-long surge, with its stock already up by a staggering 39% in 2024.

Anticipation is high as Wall Street awaits Nvidia’s earnings report, eager to see if the company can once again outperform consensus estimates, a feat it has achieved consistently in recent quarters.

What Analysts Are Expecting from Nvidia

Analysts are eyeing Nvidia to announce revenues of $20.5 billion for the fiscal fourth quarter of 2024, marking a remarkable 205% year-over-year increase. If projections hold, it would mark the third consecutive quarter where Nvidia posts revenue growth exceeding 200%.

During the fiscal Q3 earnings call, Nvidia projected fourth-quarter revenues to hit $20 billion at the midpoint, with adjusted gross margin expected between 75% and 76%. Analysts are also bullish on Nvidia’s earnings per share (EPS), forecasting a substantial 546% surge to $4.20 for the fiscal Q4.

Nvidia’s History of Surpassing Expectations

Nvidia boasts an impressive track record of surpassing earnings and revenue estimates. Over the past 20 quarters, the company has exceeded earnings expectations 19 times and surpassed revenue estimates for 18 consecutive quarters. However, despite these stellar performances, the stock has experienced mixed reactions, rising on 14 occasions and falling on six following earnings announcements.

Market Expectations and Considerations

Despite Nvidia’s consistent outperformance, market expectations remain elevated, particularly amidst the company’s ascent towards potentially joining the coveted $2 trillion club. Investors are eager for more than just beating earnings estimates, anticipating insights into Nvidia’s future growth trajectory.

Key Points to Watch in Nvidia’s Earnings Call

Investors will closely scrutinize Nvidia’s guidance for fiscal Q1 2025, especially considering the company’s exceptional performance in the previous year. Additionally, insights into Nvidia’s revenue outlook for the fiscal year and commentary on evolving market dynamics, including competition from other chipmakers and developments in the Chinese market, will be closely monitored.

Analyst Sentiment and Market Outlook

Analysts remain overwhelmingly bullish on Nvidia, with most recommending a “Strong Buy” or “Moderate Buy” rating. Despite the bullish sentiment, some analysts express concerns about Nvidia’s rapid stock price appreciation, with notable investors like Cathie Wood of ARK Invest taking a profit.

As Nvidia prepares to release its earnings report, investors brace for a showdown between bullish optimism and cautious skepticism. They are eager to gauge whether the company can sustain its impressive growth trajectory or if market expectations have become too lofty to meet.

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