Nvidia (NVDA) is expected to report third-quarter earnings after the bell on Tuesday, as Wall Street eagerly awaits an update on the fundamentals of the artificial intelligence hype cycle.
This report comes after the stock closed at a record high of $504.09 per share on Monday, with AI returning to the story amid the ongoing drama surrounding Sam Altman’s departure from ChatGPT maker OpenAI and his move to Microsoft (MSFT). moment for investors).
Expectations remain high for the chip giant as the company has become the face of 2023 AI history.
Here’s what Wall Street expects from Nvidia this quarter, compiled by Bloomberg, compared to its performance in the same quarter last year.
Revenue: $16.1 billion expected versus $5.93 billion in the third quarter last year
Adjusted EPS: $3.36 expected versus $0.58 in the third quarter of last year
Data center revenue: $12.82 billion expected versus $3.83 billion in the third quarter last year
Gaming revenue: Expected to be $2.7 billion versus $1.57 billion in the third quarter last year
Investors will also be focused on the company’s revenue outlook, with Wall Street expecting a fourth-quarter forecast of $17.8 billion. When it comes to revenue forecast, the company surprised investors the most in 2023.
In August, the stock hit an all-time high after Nvidia reported second-quarter results that beat Wall Street’s expectations for both revenue and earnings per share, and also topped forecasts that came in above lofty estimates. Back in May, an analyst described the company’s forecast as a “benchmark for eternity.”
“We expect NVDA to beat or increase consensus when it reports on November 21,” Bank of America research analyst Vivek Arya wrote in a note previewing the earnings release. The company remains positive on the stock, calling the valuation “compelling” and noting that seasonal trends remain favorable.
But after the August report was released, the stock stumbled for a few months as investors began to question Nvidia’s valuation, while updates on chip restrictions in China also changed assumptions about the ultimate size of the market the company would enter could sell, questioned.
The story goes on
In an SEC filing following the announcement, the company said it did not expect any short-term impact from the new restrictions. Stifel analyst Ruben Roy told Yahoo Finance Live he expects a similar comment from Nvidia on Tuesday.
“We think there is quite a lot of demand globally, excluding China,” Roy said. “In the US, it’s certainly the big cloud service providers… We think this will continue to be a very big opportunity for Nvidia going forward. But also outside the US and in regions like Europe, Japan and South Korea. “You name it, there’s a lot happening with AI… Nvidia remains the best way to position itself for this growth, in our view.”
Nvidia has been a driver of stock market momentum this year as a key member of the “Magnificent Seven” stocks – along with Apple (AAPL), Alphabet (GOOGL, GOOG), Microsoft (MSFT), Amazon (AMZN) and Meta (META) and Tesla (TSLA).
Together, these stocks have gained more than 70% this year through mid-November, while the remaining 493 stocks in the S&P 500 are up 6%.
Julian Emanuel, senior managing director of Evercore ISI, noted Sunday that “it’s still NVDA’s world” and warned investors to be prepared for “post-NVDA volatility” no matter which way the stock swings.
The Nvidia logo under a magnifying glass. (CFOTO/Future Publishing via Getty Images) (Future Publishing via Getty Images)
Josh Schafer is a reporter for Yahoo Finance.
Click here for the latest technology news that will impact the stock market.
Read the latest financial and business news from Yahoo Finance