Nvidia Stock: 3 Reasons to Expect a Post-Earnings Surge

Nvidia (NASDAQ: NVDA) is set to report its fiscal third-quarter earnings on Nov. 20, and investors are eagerly awaiting the results. The company's stock has been on a rollercoaster ride this year, but there are three compelling reasons to expect a post-earnings surge.

1. Blackwell GPU update and strong demand
Nvidia's upcoming earnings report is expected to provide an update on the production ramp for its next-generation Blackwell GPU. The company has already hinted that the Blackwell GPU will be its most successful product launch to date, and analysts believe that demand for the new processors is so strong that it will take the company an entire year to work through its existing order backlog. This encouraging guidance should drive the stock higher after Nov. 20.

2. Revisions to earnings estimates
Nvidia has provided encouraging third-quarter guidance, with management expecting revenue to increase 80% to $32.5 billion and non-GAAP earnings to increase 80% to $0.72 per diluted share. However, Wall Street analysts have steadily raised their earnings estimates since the company's initial guidance. The consensus now calls for earnings to increase 85% to $0.74 per diluted share, according to LSEG. This upward revision in earnings estimates suggests that analysts have uncovered signs of strong demand, which could drive the stock higher after Nov. 20.



3. Increased capital expenditures by customers
Nvidia's customers, including Alphabet, Amazon, Meta Platforms, and Microsoft, have been investing aggressively in AI infrastructure and expect capital expenditures to increase in the coming quarters. This is driven by the growing demand for advanced AI applications and the need to stay competitive in the rapidly evolving tech landscape. As a result, these companies are likely to increase their purchases of Nvidia's GPUs, which are widely recognized as the gold standard in AI acceleration. This increased demand, coupled with Nvidia's strong product pipeline and vertical integration strategy, is expected to drive the company's stock higher after its Nov. 20 earnings report.

In conclusion, Nvidia's upcoming earnings report is expected to be a major catalyst for the stock, driven by three key factors: the launch of the Blackwell GPU architecture, positive analyst sentiment, and increased capital expenditures by the company's customers. As investors await the earnings results, they can expect the stock to soar based on these three simple reasons.