What To Expect From Nvidia Earnings (NVDA)

Nvidia (NASDAQ: NVDA), a titan in the world of AI chips and data center solutions, is poised to deliver its Q3 earnings report tomorrow. The company is expected to announce an 84.4% earnings growth of $0.75 per share, significantly underscoring its robust performance in the high-demand sectors it serves.

Despite the clearly bullish momentum, Nvidia's market valuation reflects the company's high growth rate. The PE ratio above 65 is a premium above it's peers, and whilst this is something that has been earned by it's position in the market, caution over valuation may be in the minds of some, with NVDA's stock dropping 4.42% in the 5 days leading into earnings.

Holding above $140 is a strong sign, and a pullback after a bullish run can be seen as healthy. Whilst the stock has dipped 2.48% over the past month of trading, zoom out just a little, and every other time-frame shows an upward trend, with 190% gained through 2024 alone.

Moving back to tomorrow's numbers, and analysts have forecasted that Nvidia will post earnings per share (EPS) of $0.75 alongside an estimated revenue of $33.1 billion, showcasing strong growth in an increasingly tech-dependent economy. This projected year-over-year EPS growth of more than 80% echoes the company's success in capitalizing on the burgeoning AI chip and data center markets.

Nvidia has established a routine of surpassing analysts' earnings estimates in recent quarters, with consistent beats on both top and bottom lines. This comes with some expectation of markets to continue the trend, with any mis-step (however unlikely that may seem with the operational successes) likely to be harshly treated.

Looking back over the past five years, Nvidia's stock has rocketed by more than 2500%, a figure that captures significant market enthusiasm for AI and data center trends—sectors where Nvidia has a vested interest.

The prospect of Nvidia's Blackwell GPU servers is another cause for optimism among investors and analysts, as they are expected to drive substantial market demand. With potential annual revenues surpassing $200 billion, Nvidia's growth trajectory seems promising.

Investors eyeing Nvidia's stock before the Q3 earnings report should weigh these factors as they consider the potential rewards and premiums already built into the current share price. As it stands, Nvidia’s pioneering role in AI and substantial market growth sets a constructive scene for its upcoming earnings announcement.