'The AI party is just getting started': Here's what Wall Street expects from Nvidia's 4th-quarter earnings

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'The AI party is just getting started': Here's what Wall Street expects from Nvidia's 4th-quarter earnings
Jensen Huang, CEO of NVIDIA, speaks during a press conference at the Computex 2023 in Taipei on May 30, 2023.Sam Yeh/AFP/Getty Images
  • Nvidia is set to report its fourth-quarter earnings after the market close on Wednesday.
  • The highly anticipated report will shed light on the booming AI business in the tech space.
  • Here's what Wall Street expects from Nvidia's upcoming earnings report.
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All eyes are on Nvidia as it is scheduled to report its fourth-quarter earnings results on Wednesday after the market close.

Nvidia has spearheaded the excitement seen in artificial intelligence technologies, and investors will look to the company's results to see if the hype can continue.

Wall Street analysts are laser focused on the company's demand outlook for its AI-enabled H100 GPU chips, which can sell for upwards of $40,000, as well as its planned product roadmap over the next year.

Here are the quarterly figures Wall Street expects from Nvidia, according to data from Bloomberg:

  • Revenue: $20.41 billion
  • GAAP earnings per share: $4.23
  • Adjusted earnings per share: $4.60
  • Gross margin: 75.4%

While Nvidia has seen incredible demand for its chips from cloud hyperscalers like Microsoft and Amazon, regulatory hurdles have curtailed its ability to sell chips to China, which made up about 20% of its total revenue last year.

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Driving much of the strength in Nvidia's business has been its exposure to data-centers. Investors will be looking to see just how much demand could be left for the data-center market, and whether Nvidia has lost any market share to its competitors like AMD.

Here's what Wall Street analysts are saying about Nvidia's upcoming earnings report.

1. Wedbush: 'Get the popcorn ready'

Wedbush analyst Dan Ives said in a note on Monday that Nvidia's quarterly results and outlook will hinge on enterprise spending.

"The AI revolution starts with Nvidia and in our view the AI party is just getting started," Ives said.

"While the Street across the board is anticipating another major 'beat and raise' special from Jensen & Co. its all about the pace of data center AI driven spending as the only game in town for GPUs to run generative AI applications all go through Nvidia. We believe peak spending is still ahead for the AI market as many enterprises head down the AI use case path over the next few years and we are expecting more good news from the Godfather of AI this week," Ives said.

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"We are laser focused on what the trajectory of GPU orders and demand flow looks like from enterprises," Ives said.

2. Bank of America: 'Notable but measured beat'

Bank of America expects Nvidia to modestly beat analyst expectations on Wednesday, but not by the margins it has in the past.

The bank said Nvidia could beat earnings by 3% and raise its outlook by 5%, which would be significantly lower than the company's prior earnings beat of 10% and guidance boost of 22%.

"The more measured pace will also be seen as creating more fertile ground for continued growth in CY25 and beyond," Bank of America said.

The bank expects investors' focus on Nvidia after earnings will be its product roadmap, which could be showcased at its GPU Tech Conference in mid-March.

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Bank of America rates Nvidia at "Buy" and calls it a "Top Pick" with a $800 price target.

Bloomberg Intelligence: 'Nvidia to maintain stronghold in data-center market'

Bloomberg Intelligence associate Oscar Tejada said in a Friday note that Nvidia will likely impress investors on Wednesday.

"With supply visibility for Nvidia's GPUs improving, yet still behind demand, and appetite for generative AI not slowing, Nvidia will likely report another solid 4Q, with a positive outlook toward 2025," Tejada said.

But another double-digit beat and raise from Nvidia is unlikely amid rising supply of Nvidia's GPUs and shortened lead times for its customers.

"Nvidia's focus on securing more supply and diversifying into Enterprise and Sovereign projects should reaffirm continued demand through 2025. Also, hyperscale cloud service providers like Meta and Microsoft continue to invest in AI-powered data centers, despite proprietary chip projects," Tejada said.

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