Nvidia (NVDA) will report its Q3 results after the bell next Wednesday, giving Wall Street its best and latest look at the power of AI trading.
As the world’s largest publicly traded company by market capitalization, Nvidia’s share price has continued to rise through 2024, thanks to the explosive growth of AI across the technology landscape and beyond. Nvidia shares rose 189% year to date from Friday, easily outpacing the company’s chip rivals. AMD (AMD), Nvidia’s closest competitor, has seen its share price fall nearly 8% year to date, while Intel (INTC), which is facing a difficult turnaround, has seen its share price fall 51%.
Nvidia is expected to report third-quarter earnings per share (EPS) of $0.74 on revenue of $33.2 billion, according to Bloomberg analyst estimates. That represents an 83% year-over-year increase on both the top and bottom lines, compared to the same period last year, when Nvidia saw earnings per share of $0.40 on revenue of $22.1 billion.
Nvidia’s data center segment, its largest, is expected to bring in $29 billion this quarter. That’s a 100% increase from the $14.5 billion the company reported in the third quarter last year.
Gaming revenue is expected to reach $3 billion, up 7% from last year when the segment brought in $2.8 billion.
Analysts expect gross margins to reach 75%.
Investors will be looking to see not only whether Nvidia outperforms on both the top and bottom lines this quarter, but also whether Nvidia will raise its fourth-quarter guidance. Analysts expect Nvidia to announce fourth-quarter revenue guidance of $37 billion in the coming quarter.
Even if the numbers and prospects are excellent, shares can still fall after the earnings release. Nvidia beat expectations on the top and bottom lines and beat expectations in the second quarter, but its shares still fell 6% immediately after it announced results.
That could have been a sign that some investors were unimpressed with Nvidia’s performance compared to previous quarters, where it saw 200% revenue growth and nearly 600% earnings per share. Or it could simply mean that investors are taking profits on their profits at the time.
Investors will also look for any insights from CEO Jensen Huang on Nvidia’s next-generation Blackwell line of AI chips, which are used to both train and run AI applications. During the company’s last earnings call in August, Huang said production at Blackwell will pick up in the fourth quarter, when he expects several billion dollars in revenue from the chips.
Huang said at the time that demand for Blackwell was already exceeding supply, and he expects that to continue in the coming year. In addition, he said the company’s Hopper chip, the precursor to the Blackwell line, is expected to continue selling well into the next quarter.
