NVIDIA's Q3 Earnings to Shed Light on AI Dominance Amid Stock Pullback
1min read In an eagerly anticipated week, NVIDIA prepares to release its Q3 earnings report on November 20, marking its first financial disclosure since being incorporated into the Dow Jones Industrial Average. Following a historic peak of $149.77, NVIDIA's stock saw a retreat, dropping by 3.83% this week. Analysts expect promising results, with projected revenue of $330.8 billion, an 83% year-over-year increase, and adjusted net income surging by 84% to $184.6 billion.
Several market analysts have raised their target prices for NVIDIA, attributing this optimism to the ongoing development of AI applications, particularly with NVIDIA's next-gen Blackwell AI chip. Top analysts predict robust demand for Blackwell, seeing it as a significant revenue driver for NVIDIA moving forward. Morgan Stanley's Joseph Moore forecasts Q1 2024 Blackwell sales between $50 billion and $60 billion, highlighting a potential supply constraint that could affect NVIDIA's future guidance.
Analysts align in their view that NVIDIA's strategic positioning within the AI sector remains strong, especially in AI training and inference chips for data centers, a domain where NVIDIA holds an impressive 95% market share. The surging demand for NVIDIA chips underscores its role as a critical player in fueling AI advancements, from chatbots to autonomous vehicles. Consequently, investors remain focused on NVIDIA's performance as a bellwether for the broader AI hardware industry.
In addition to NVIDIA, a suite of Chinese tech stocks is preparing to announce their earnings, continuing the trend of increasing Chinese involvement in global markets. As AI technology continues to evolve rapidly, attention is shifting towards AI software, with recent notable surges in software stocks driven by FOMO (Fear of Missing Out) sentiments.
Ultimately, NVIDIA's upcoming earnings report serves as a significant indicator for the company and offers insights into future market directions, particularly as it navigates the early stages of the AI revolution. Its capacity to maintain leadership amid growing competition from other chip manufacturers will be crucial for sustained growth.