Nvidia to report quarterly results on Wednesday — here's what investors should watch for

Nvidia, the artificial intelligence chip leader and second-most valuable company in the world, will report its fiscal first-quarter earnings after markets close Wednesday, and analysts are optimistic about the company with strong predictions, as per a report.

Wall Street is predicting a record quarter driven by massive demand for artificial intelligence infrastructure, according to Investopedia. On average, analysts project Nvidia to generate $43.38 billion in revenue, up 66% year over year, as per the report. Adjusted net income is predicted to reach $21.29 billion, or 87 cents per share, from $15.24 billion, or 61 cents per share, in the same quarter last year, reported Investopedia.

Hyperscaler Spending Is Fueling Nvidia’s Growth

Wedbush analysts explained that Nvidia is benefiting from big expenditures on AI infrastructure by the largest players in the tech industry, like Alphabet, Meta, Amazon, Microsoft, and Apple, as per the report. Hyperscalers are trying to scale up their AI capacity, and most of that expenditure ends up directly in Nvidia's leading-edge chips driving next-generation data centres, according to Investopedia.


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The analysts highlighted that "spending on AI in particular ends up flowing to [Nvidia] which supplies a disproportionate amount of the AI server value,” as quoted in the report.

However, analysts may ask Nvidia CEO Jensen Huang about sales to China as the US presdient Donald Trum's administration earlier this year imposed even tighter export controls for China, as per Investopedia.

Nvidia's China Sales and US Export Restrictions

While, the chipmaker has already warned of a $5.5 billion loss due to restrictions on its H20 chip, and the CEO has reportedly described the export curbs as a policy “failure”, as it is helping China to increase development of its own AI chips, according to the report.

As per Investopedia, Oppenheimer analysts are anticipating that the impact of the US export restrictions would be relatively modest. The analysts wrote that, “We see upside … despite the loss of H20 sales to China,” and highlighted that the country now makes up just 5% of Nvidia’s total sales, reported Investopedia.

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Investor Confidence Remains High

Meanwhile, both Wedbush and Oppenheimer have maintained “outperform” ratings for Nvidia stock, and have projected price targets of $175, as per the report. Out of the 18 analysts monitored by Visible Alpha, 16 have a “buy” rating for Nvidia stock, while two have “hold” ratings, as per Investopedia. Their consensus price target close to $164 indicates that it is around 25% upside from Friday’s closing price, according to the report.

FAQs

When is Nvidia reporting earnings?
After the market closes on Wednesday.

How much revenue is Nvidia expected to make?
Around $43.38 billion for the quarter, up 66% year over year, as per Investopedia.