Investors will once more think about the long term when Nvidia Corp. reports its earnings next week.
Oppenheimer Rick Schafer said that it’s pretty clear that the company is seeing “insatiable” demand for AI accelerators. He also said that he and most others expect Nvidia NVDA, -1.99% to report another beat-and-raise quarter when it reports quarterly earnings on Wednesday afternoon.
But Wall Street doesn’t seem to care as much about the present now that Nvidia is getting ready to ship its new Blackwell chip line later this year.
Jefferies analyst Blayne Curtis wrote, “The bar is quite high for NVDA, but the level of the beat-and-raise likely takes a back seat to the ramp of the GB200 NVL and next year.” He was talking about the company’s Grace Blackwell exascale computer.
Also, the phrase “air pocket” is used a lot these days when people talk about Nvidia. For investors, this means they want to know if there will be a demand speed bump as people get ready for the Blackwell launch.
“Concerns of an air pocket ahead of Blackwell was a frequent concern we heard post our launch, but we don’t see any signs of that with [cloud service providers] still catching up on supply and a long tail of customers behind them who could not get product last year,” Curtis wrote. “We believe the ramp of the GB200 NVL products is a large driver for the story as NVDA will once again extend their control to a greater portion of the AI system design.”
Vivek Arya of BofA Securities wrote that Nvidia shares could be “volatile” in the short term because of things like “quarterly deceleration ahead of Blackwell.”
Even though most investors think the company will make $26.5 billion in sales this quarter, some investors are expecting nearly $28 billion. Arya said that “the stock could still react unfavorably” if the company meets those optimistic expectations.
That’s because sales growth could slow down to between 7% and 8% in the July quarter, which is “well below the mid-teens or better rate the last few quarters,” he wrote.
Investors will also keep an eye on gross margins to see if they have reached their highest point. There was a drop in prices, an unfavorable mix (more China H20 shipments and/or more inference units), and a slowing demand/easing supply, according to Arya.
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