Nvidia reports its earnings after the close on Wednesday. Shares have more than tripled this year.
Dream time
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Nvidia is in the driver’s seat.
Almost everyone is aware that demand for the company’s AI chips is likely to outpace supply for a while. The crucial question for investors is when
nvidia
Announcement (Ticker: NVDA) of Earnings Results After Wednesday’s Close It’s not about the near-term situation, but whether or not the company can show progress in easing supply restrictions in the long term.
The consensus forecast on Wall Street calls for
nvidia
To report July quarter revenue of $11.2 billion, with adjusted earnings per share of $2.08. Analysts estimate for revenue for the current quarter is $12.6 billion.
Nvidia dominates the chip production market It is used for AI projects, making it the primary beneficiary of the generative AI trend. This type of technology is being used by chatbots, among them OpenAI’s ChatGPT – which set off a wave of excitement after it was introduced late last year.
Nvidia chips are favored by startups and companies because of its powerful software programming platform, known as CUDA. Developers have been building and sharing AI-related tools and software libraries for more than a decade on Nvidia’s proprietary platform, making it easy to quickly build AI applications.
Several analysts said the current constraint on Nvidia’s revenue is advanced chip packaging capacity in its semiconductor foundries — not demand.
Last week, Morgan Stanley analyst Joseph Moore reiterated his overweight assessment of Nvidia stock, adding in a research note that the company meets less than half of current demand for its AI products. He also reaffirmed his $500 price target for the shares.
Nvidia is benefiting from “a massive shift in spending toward AI and a somewhat exceptional imbalance between supply and demand,” he wrote. “We expect a very positive outlook, but it’s important to recognize that the exact revenue number in October (guidance) is less important than the overall path” going forward.
Moore expects Nvidia to report better-than-expected results and guidance, while offering positive commentary about its future results for the next three to four quarters. Nvidia’s top officials may reveal details about the matter during its conference call with investors.
Nvidia stock is up about 213% so far this year, instead
Standard & Poor’s 500
gained 14%.
Write to Tae Kim at tae.kim@barrons.com
(tags for translation) Computers/Consumer Electronics
