Most Anticipated Earnings for Week of August 26th 2024

Can NVIDIA's financial report renew the AI faith?

Mon: PDD

Wed: NVDA, CRWD, HPQ, LI

NVIDIA (NVDA) is set to release its financial results for the second quarter of the 2025 fiscal year after the market closes on August 28th. As of the close of the U.S. stock market on August 21st, NVIDIA's stock has surged by approximately 157% this year, with a market capitalization exceeding $3 trillion, making it the third largest company by market value in the U.S.

As of August 21st, analysts predict that NVIDIA's second quarter earnings per share under Non-GAAP for the 2025 fiscal year will be $0.64, with estimated revenue of $28.6 billion. If the results meet expectations, the revenue will have increased by 111.8% compared to the same period last year, and by 9.8% compared to the previous quarter's $26.04 billion.

Specifically, the revenue from NVIDIA's core data center business is expected to reach $24.9 billion, representing a year-on-year growth of approximately 141% and a quarter-on-quarter growth of about 10.4%. The five tech giants (Apple, Microsoft, Google, Meta, and Amazon) are expected to exceed $220 billion in capital expenditure for the 2024 fiscal year, a growth of 45-50% compared to the 2023 fiscal year.

Ahead of the earnings release, Goldman Sachs has shown strong support for NVIDIA. Despite the delay in shipping the Blackwell series GPUs causing some short-term fundamental fluctuations, it is expected to have a relatively minor impact on overall profitability for the year. Goldman Sachs believes that NVIDIA's performance this time will significantly exceed expectations due to strong demand from large cloud service providers and enterprise customers, maintaining a target price of $135.

On the other hand, Morgan Stanley called to buy NVIDIA amidst the market turmoil in early August, giving a target price of $144. Morgan Stanley believes that NVIDIA's revenue and EPS growth rate will exceed 100%, with a PE ratio of approximately 40 times based on the valuation for the next 12 months, placing the high-growth AI giant within a reasonable forecast range.

Investors should also be aware of potential risks, such as delays in Blackwell GPU shipments, supply chain issues, saturation of the generative AI market, global macroeconomic impacts, and intensified competition in custom chip manufacturing among tech giants.