Nvidia (NVDA) reports third-quarter results after Tuesday’s close, with the chip stock up over 200% year-to-date amid growing enthusiasm over artificial intelligence.
Yahoo Finance’s Brad Smith, Brian Sozzi and Seana Smith discuss the Street projections, providing insights into various factors that could impact the chipmaker’s third-quarter results.
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BRAD SMITH: It’s a big week for Nvidia as the company gets set to report third quarter results after the bell today. The chip-makers blockbuster earnings report back in May sent a ripple effect through the market as investors bet big on the future of AI. Nvidia shares are up over 200% so far this year. We’re taking a look at that year-to-date chart, 245% in a move higher here.
We were discussing this with Reuben Roy yesterday over at Stifel, looking for the data center segments to have revenue of about $12.9 billion, also looking for the gaming segment to see about $2.6 billion. That would be an increase year over year of about 68% there. But at the end of the day, it really comes down to what they say about artificial intelligence demand and what they say about the data center this quarter.
SEANA SMITH: Yeah, and also we could even get a blowout report. And that might not be enough for the street when you mentioned the fact that we have seen the surge in share price obviously since the start of the year. Now we’re above $500 a share. And we did see that to a certain extent following the August report that we did get out.
Yes, that was a very solid number here. But we did see some of that momentum fade pretty quickly when we started– when we started to see the street get a little bit more worried just about the restrictions for exporting to China in terms of AI chips and what exactly that could mean for Nvidia and the broader chip business here going forward.
But you take a look at some of these expectations here continuing a continuation of raising their profit estimates from the street. The average projection for fiscal 2025 adjusted EPS has nearly tripled in the past six months when you take a look at some of the data here.
When you take a look at third quarter sales growth, 171%, that is what is expected here. Blowout numbers even if they meet those expectations, not exactly. We could see a little bit of a disappointment here from the street.
BRIAN SOZZI: Seana, killer stats only hanging. Look, here are five things I’m watching for Nvidia. And I loved all that stuff. Five things. First up, the China comments. Anything related to China in that relationship going south because of efforts by the Biden administration, I wanna know what Nvidia says.
Number two, supply. Are they making enough chips to supply the very strong demand around the world they are seeing? Number three, quarter-over-quarter growth rates in earnings and sales. In an ideal case, you wanna see Nvidia show accelerating growth rates. Unclear if that will happen.
Number four, I wanna know if Jensen uses this moment to speak to anything regarding Sam Altman and the broader AI push. And then last but not least, very curious on the stock market reaction. If Nvidia comes out here, clobbers estimates offers great guidance. Does the stock pull back? And what does that mean next week or in the further weeks for the broader AI trade, companies like an AMD and even an Intel?
BRAD SMITH: Yeah, it just points to the fact that it’s gonna be an absolute goldilocks report. It’s almost like they have to hit a grand. Show they hit a grand slam in this most recent quarter. Project another grand slam. And then at the same time, have Jensen mentioned all of the things that you talked about there. He’s no doubt probably gonna do it in a leather jacket as well.