Nvidia name against stock market up arrow
A lot is riding on this evening’s Nvidia earnings / Image source: Adobe
  • Analysts widely see chip firm beating and raising
  • Year-on-year net income set for $11 billion surge
  • Will have massive implications right across major markets

Just as Glastonbury go’ers might love a bit of Paul Heaton, Paloma Faith and Sza, it’s Coldplay and Dua Lipa that will headline the Pyramid stage this summer. So far, the first quarter earnings support acts have been good, now for the main event.

Investor enthusiasm over all-things AI (artificial intelligence) has helped the tech-heavy Nasdaq Composite Index rally to all-time highs this year, up 14%, and it’s Nvidia (NVDA:NASDAQ) that has really got the party going, surging 98%.


Wall Street seems to have decided that earnings will be ‘monster’ and that the chip firm’s brand of beat and raise guidance will be another mega hit with the crowds. Options imply an 8% to 9% jump on the results, analysts say, although any sniff of softness could seriously hurt sentiment and the overall market.

You must go back to November 2022 for the last time Nvidia failed to outstrip estimates – what a great buy the dip opportunity that tuned out to be at around $160.

Revenues are seen +241% to a little more than $24.5 billion year-on-year, with net income soaring from $2 billion to almost $13 billion. Earnings per share are pitched at $5.58 versus $0.92, according to Investing.com data.

In the near-term, investors will want to know more about any potential delay in new chip orders as it transitions to new models. The print will also be scanned for any word on improvement or not from China.

Sky-high expectations leave no room for earnings disappointment

But as we noted in Shares (16 May), ‘having beaten expectations that have been raised multiple times over the past couple of years, investors are left with the question of how long it can keep shooting the lights out.’


Yet optimism is running high among analysts. ‘We expect Nvidia to beat and raise in the April quarter, albeit not reaching the levels of the January quarter, due to improved supply and anticipated year-over-year deceleration from tougher comparisons’, said analysts at Rosenblatt.

‘We expect volatility into this week’s print but are nonetheless positively biased on a story that is increasingly resonating with the best secular idea in all of technology.’

‘The combination of decelerating revenue growth and increased concerns about competition has driven Nvidia’s relative PE ratio (price to earnings) to the lower-end of the 10-yr range, creating a scenario where a healthy beat-and-raise will lead to near-term upside to the stock… and we expect a healthy beat-and-raise,’ said EvercoreISI.

Nvidia’s earnings are likely to reverberate right across the AI space, which could mean big moves for companies like Super Micro Computer (SMCI:NASDAQ), Advanced Micro Devices (AMD:NASDAQ)Arm Holdings (ARM:NASDAQ) and Palantir Technologies (PLTR:NYSE).

Nvidia earnings are due after the Wall Street close this evening, at around 9.30pm UK time.

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Issue Date: 22 May 2024