Nvidia Q3 Earnings, Fed Commentary: Key Factors to Watch

As the tech sector braces for another quarterly earnings season, all eyes are on Nvidia and the Federal Reserve's upcoming commentary. Nvidia's Q3 earnings report, scheduled for November 21, and the Fed's policy statement on the same day will provide valuable insights into the health of the tech industry and the broader economy. Here are the key factors investors should watch for.



1. Nvidia's Gaming Segment Performance
Nvidia's gaming segment has been a significant driver of its revenue growth. In Q2, the segment contributed $2.86 billion, up 81% year-over-year. Analysts expect this trend to continue in Q3, with revenue projected to reach $3.05 billion. The strong performance can be attributed to the growing demand for AI hardware in the industry, as well as the popularity of Nvidia's GeForce RTX 40 series GPUs. Additionally, the segment's growth is supported by the increasing interest in esports and cloud gaming, which are driving demand for high-performance graphics cards.

2. Blackwell AI Chip Shipments
Nvidia's Blackwell AI chip is a significant development for the industry, and strong shipments could drive revenue growth. However, supply constraints may limit the near-term upside. Morgan Stanley analysts expect NVDA's Data Center business to drive growth, with a focus on generative AI. Investors will be keen to hear updates on Blackwell AI chip shipments during the earnings call and their potential impact on revenue growth.

3. Data Center Revenue and Growth
Nvidia's data center revenue hit a record $14.51 billion in Q2, accounting for over 70% of its total revenue. Analysts expect this trend to continue, with data center sales projected to reach $14.6 billion in Q3. Keep an eye on this metric to assess Nvidia's growth potential in the cloud computing and AI sectors.

4. Fed's Economic Growth, Inflation, and Monetary Policy
The Fed's recent commentary on economic growth, inflation, and monetary policy is expected to align with recent trends and projections. The Fed has been monitoring inflation closely, with the latest projections indicating a median PCE inflation rate of 2.3% for 2024, down from the June projection of 2.6%. The median unemployment rate is projected to be 4.4% in 2024, slightly higher than the June projection of 4.0%. These projections suggest a continued focus on balancing economic growth and inflation control.

5. Geopolitical Risks and Their Impact on Nvidia
Tensions between the U.S. and China, as well as other global political dynamics, may impact Nvidia's supply chain and sales. Monitor the company's commentary on geopolitical risks and their potential impact on earnings during the earnings call.



In conclusion, Nvidia's Q3 earnings and the Fed's commentary will provide valuable insights into the company's performance and the broader market trends. By focusing on key metrics and geopolitical risks, investors can make informed decisions about Nvidia's future prospects. Keep an eye on Nvidia's gaming segment performance, Blackwell AI chip shipments, data center revenue, and the Fed's projections for economic growth, inflation, and monetary policy to stay ahead of the curve in the tech and finance worlds.