Nvidia (NVDA) will report its third-quarter earnings after the bell today, giving Wall Street its best and latest look at the power of artificial intelligence 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 196% year to date from Wednesday, easily outpacing the company’s chipmaker rivals. AMD (AMD), its closest competitor, has seen its share price fall more than 5% year to date, while Intel (INTC), which is facing a difficult turnaround, has seen its shares plummet almost 52%.
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 in both revenue and revenue 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 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 will perform on both the top and bottom lines for the third quarter, but also whether it will raise its guidance for the fourth quarter. Analysts expect Nvidia to forecast revenue of $37 billion this quarter.
Even if the AI chip leader delivers an excellent report and outlook, the stock price could still fall. Nvidia beat expectations on the top and bottom lines and beat expectations in the second quarter, but the stock fell 6% immediately after the results.
That could be 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 investors taking profits on their gains.
Investors will also look forward to insights from CEO Jensen Huang on Nvidia’s next-generation Blackwell line of AI chips, which are used to train and run AI applications. During the company’s last earnings call in August, Huang said production at Blackwell would pick up in the fourth quarter, when he expects several billion dollars in revenue from the chips.
At the time, Huang said demand for Blackwell was already exceeding supply, and he expected that to continue in the coming year. In addition, he said the company’s Hopper chip, the precursor to the Blackwell line, was expected to continue selling well into the fourth quarter.
However, shipments to Blackwell have been delayed, and on Sunday the Information reported that the AI chips have encountered problems with overheating servers – a possible delay in installation in data centers.
Nvidia faces an uncertain future as Donald Trump has threatened to impose blanket tariffs on products from around the world.
Moreover, the newly elected president has stoked the specter of tariffs on Taiwanese chips. That would be a potential alternative to the CHIPS Act, which is intended to bring semiconductor production back to the US.
The vast majority of Nvidia’s chips are built by TSMC in Taiwan. A tariff could mean Nvidia will charge more for its AI chips, lowering margins, or the extra costs will be passed on to its customers. Investors will certainly be looking for advice that Huang has to offer on this topic.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.
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