What To Expect From Nvidia Earnings?

Nvidia (NASDAQ: NVDA) is positioned to make headlines next week as it prepares to release its quarterly earnings data after the market closes on Wednesday, May 22nd. With the stock having become one of the most important across tech, growth, and mega caps, there is sure to be a mass of eyes on the data, and equally the outlook guidance.

The technology giant, known for its GPU excellence, has set expectations on a steady trajectory with analysts predicting earnings of $5.48 per share for the quarter, against revenues of $24.7bn. This comes in the wake of the company's previous performance where NVIDIA reported earnings of $5.16 against an expectation of $4.63, demonstrating the solid track record of earnings surprise beats that followers of the firm have become accustomed to over the last year.

The previous quarter's revenue stood at an impressive $22.10 billion, marking a significant year-over-year increase. Data Centre revenue has grown at a rate of knots over the past couple of years, with Nvidia driving that particular stream from $3bn in 2020, to $15bn in 2023.

The GPU demand at Nvidia, previously driven by gaming, has added many new strings to its' bow, becoming a key component in the AI industry expansion, as well as crypto mining; both of which have had a surge in demand through 2023/2024. The Bitcoin halving event, as well as the broadening use cases for AI, with companies looking to adopt the technology into as many areas as possible were important elements to that demand spike.

In the stock market arena, NVIDIA has witnessed its shares soaring toward the upper end of the 52 week range, surging from the twelve-month low of $294 up to the current mark of $943. 212% growth in NVDA stock over 12 months tells a large part of the story, and the sentiment from analysts and market commentators remains resoundingly positive.

Recently, the firm announced a quarterly dividend, which whilst low in pure % terms, indicates a commitment to delivering shareholder value, and a move that aligns with other mega cap growth names in Wall Street that have started offering dividends.

Recent Deals And Target Adjustments

On 16th May, Northrop Grumman (NOC) announced an agreement for the use of Nvidia AI software, including Omniverse to accelerate development of some of the most advanced systems.

“NVIDIA's AI platforms will help us deliver Northrop Grumman's advanced capabilities to our customers faster and with greater effect,”

Vern Boyle, Vice President, Northrop Grumman Microelectronics Center

On Tuesday 14th, a deal for Cerence (NASDAQ: CRNC) to tap into Nvidia's knowledge was announced .

“The integration of AI has become pivotal in shaping the future of driving experiences. As vehicles transition into smart, connected entities, the demand for intuitive human-machine interfaces and advanced driver assistance systems has surged In this journey toward automotive intelligence

Analysts at Jefferies increased their own price target to a lofty $1200, up from $780. Clearly bullish about the prospects in the note, the belief that the group is “still early in the cycle” indicates significant potential upside according to the analyst on a stock that has already done so much in recent years.

Whilst it is significantly more challenging to find views on Nvidia that are not positive, there is a growing view that there is increasing competition coming. It is only through continued operational excellence, of which the company has delivered so far, that will provide an ongoing edge, and the first mover advantage may also help provide an additional buffer.

As markets count down to NVIDIA's earnings release, the results will undeniably produce substantial interest and provide critical insights into the company's performance and strategic direction in the rapidly evolving tech industry.