Nvidia (NVDA) will release its third quarter earnings after the bell today, giving Wall Street the best and most up-to-date information on the strength of the artificial intelligence industry.
Nvidia’s stock price, the world’s largest publicly traded company by market capitalization, continued to soar throughout 2024, thanks to the explosive growth of AI in the technology industry and other sectors. Nvidia stock is up 192% since the beginning of the year as of Wednesday, well outpacing the company’s rival chipmakers. Shares of its closest competitor, AMD (AMD), are down more than 5% since the beginning of the year, and Intel (INTC), which is struggling to turn around, is down nearly 52%.
Nvidia is expected to post third-quarter earnings per share (EPS) of $0.74 and revenue of $33.2 billion, according to analyst estimates compiled by Bloomberg. This compares to the same period last year, when Nvidia had EPS of $0.40 and revenue of $22.1 billion, representing an 83% year-over-year increase in both revenue and bottom line.
Nvidia’s data center division, its largest business, is expected to bring in $29 billion in revenue for the quarter. This is a 100% increase from the $14.5 billion reported in the third quarter of last year.
Gaming revenue is expected to peak at $3 billion, up 7% from last year, when the sector brought in $2.8 billion.
Analysts expect gross profit margin to reach 75%.
Investors will be watching to see not only whether Nvidia can beat third-quarter sales and bottom line results, but also whether it raises its fourth-quarter guidance. Analysts expect NVIDIA to report revenue of $37 billion for the quarter.
Even if the AI chip leader releases a great report and outlook, the stock could still fall. Nvidia beat expectations for revenue and bottom line in the second quarter, beating expected guidance, but the stock fell 6% immediately after the earnings call.
This could be a sign that some investors aren’t impressed with Nvidia’s performance compared to the previous quarter, when revenue increased 200% and EPS increased nearly 600% . Or it could simply result in investors taking a profit and making a profit.
Investors will also be looking for insight from CEO Jensen Huang on Nvidia’s next-generation Blackwell AI chip products, which will be used to both train and run AI applications. During the company’s last earnings call in August, Huang said Blackwell’s production would ramp up in the fourth quarter and that the chip was expected to generate billions of dollars in revenue.
At the time, Hwang said demand for Blackwell was already outstripping supply and expected that trend to continue over the next year. Additionally, he said he expects the company’s hopper chips, the predecessor to the Blackwell product line, to continue selling well into the fourth quarter.
