One of the most valuable companies in the world, NVIDIA Corporation NVDA could serve as a leading market indicator for the technology and semiconductor sectors when it reports second-quarter financial results on Wednesday, Aug. 28 after market close.
Earnings Estimates: Analysts expect Nvidia to report second-quarter revenue of $28.68 billion, according to data from Benzinga Pro.
The company reported revenue of $13.5 billion in last year's second quarter. Nvidia has beaten revenue estimates from analysts in seven straight quarters and nine of the past 10 quarters.
Analysts expect the company to report second-quarter earnings per share of 64 cents compared to 27 cents per share reported in last year's second quarter. The company has beaten earnings estimates in six straight quarters and eight of the past 10 quarters.
Guidance from the company calls for second-quarter revenue to be $28.0 billion, plus or minus 2%.
The earnings report comes with Nvidia shares up 166% year-to-date in 2024, as shown on the Benzinga Pro chart below.
What Analysts are Saying: Nvidia beating analyst estimates and raising guidance is the expectation from WestPark Capital analyst Kevin Garrigan.
The analyst reiterated a Buy rating and $127.50 price target ahead of the earnings report.
"Revenue will be driven by sequential growth across all end-markets, with the Data Center end-market providing revenue upside," Garrigan said.
The analyst said Hopper demand appears strong based on data points from cloud customers and the AI supply chain.
A delay of Blackwell GPUs is seen having no impact on the second quarter or third quarter for the analyst, who also sees Hopper GPUs helping to fill the gap in the fourth quarter.
"We believe the AI cycle is far from over, with Nvidia in a prime position to continue to benefit. We continue to view Nvidia as an industry leader in AI and accelerated computing, with a first mover advantage and wide moats."
The analyst said any pullback in Nvidia stock post-earnings could be a buying opportunity for investors.
Improving fundamental and sentimental factors surround Nvidia ahead of the earnings report, Truist analyst William Stein said in a new investor note.
The analyst reiterated a Buy rating and raised the price target from $140 to $145.
"Ahead of NVDA's CQ2, our regular dialog with component buyers and sellers reflected NVDA business trends continuing to improve," Stein said.
Stein said data on AI investments and adoption leads to estimates being raised ahead of the earnings report.
The analyst doesn't believe Blackwell is delayed and that the order patterns have improved.
Nvidia will not be able to keep up with 250%+ year-over-year growth going forward, the analyst warned.
"We believe there is a solid case for ongoing rapid growth over the next few years."
The analyst said companies are continuing to spend on artificial intelligence, which will continue to benefit Nvidia.
Key Items to Watch: All eyes will be on the company's key revenue and earnings per share figure alongside forward-looking guidance.
Investors and analysts will also be looking to see how the Data Center segment performed. Data Center revenue was up 427% year-over-year in the first quarter and continues to be a high-growth area for the company.
As one of the largest companies in the world and a key component in many stock indexes, the reaction to Nvidia's earnings report could have a ripple effect on the market to close the week.
Freedom Capital Markets Chief Global Strategist Jay Woods recently shared the importance of Nvidia's earnings report during an interview on Benzinga's "PreMarket Prep."
Woods said Nvidia could take a lot of boats with it, depending on how investors react to the earnings. A re-balancing in a major technology ETF has made Nvidia more important than Apple, Woods added.
Although Woods is cautious about Nvidia's momentum ahead of its second-quarter results, he still considers the stock one of the best long-term picks.
“My best idea is just buy Nvidia and put it away and don’t look at it.”
Nvidia CEO Jensen Huang highlighted the company's opportunities in several high-growth areas during the company's first-quarter earnings report.
"The next industrial revolution has begun — companies and countries are partnering with Nvidia to shift the trillion-dollar traditional data centers to accelerated computing and build a new type of data center — AI factories — to produce a new commodity: artificial intelligence," Huang said.
Huang said AI will bring productivity gains to "nearly every industry."
Commentary on demand and use cases from Huang could keep the AI investment theme front and center for investors.
NVDA Price Action: Nvidia shares trade at $128.47 on Tuesday versus a 52-week trading range of $39.23 to $140.76.
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