Investors are eagerly waiting for Nvidia‘s (NVDA) Q4 earnings, scheduled for February 25. The last earnings report was an absolute smasher, yet the stock market reacted negatively.
The stock closed at $186.52 on the day of earnings and closed at $180.64 on the next day. I covered analysts’ reactions to those earnings in my article “Goldman Sachs, JPMorgan and BofA drop verdicts on Nvidia earnings.”
The situation feels a lot different this time. Last earnings were after Nvidia started its downward trend after hitting its peak closing price of $207.04 on October 29, according to Yahoo Finance.
This time, it is approaching earnings after recovering from a sharp drop, closing at $171.88 on February 5.
It looks like the AI bubble fears have taken their toll and are subsiding, and the hope is that, aside from an earnings smasher, incoming Blackwell-trained models will reignite the high expectations for future AI models. Also, the approaching Vera Rubin launch helps.
-
Revenue is expected to be $65.0 billion, plus or minus 2%, as indicated in the Q3 earnings report.
-
GAAP gross margins are expected to be 74.8% plus or minus 0.5%.
-
GAAP operating expenses are expected to be approximately $6.7 billion.
Morgan Stanley analyst Joseph Moore and his team expect strong Q4 results from Nvidia, and have very high confidence that the company will perform well for the full year.
Analysts, who said the last quarter was very robust, with $3 billion of upside and $10 billion of sequential revenue growth, were disappointed by the stock market reaction.
Related: History of Nvidia: Company timeline and facts
They noted that while it is obvious that intensifying shortages of DRAM, NAND, HDD, optical, CPU, and power could be bottlenecks that could improve visibility for GPUs, they are not seeing that, as demand for all forms of AI compute, including trailing-edge, remains strong.
Moore expects the ramp of Vera Rubin to happen roughly on time, but he sees potential for a steeper ramp in Rubin supply than his initial expectations, as forecasts have shifted from Blackwell to Rubin in the second half of the year more rapidly than expected.
He noted that for the last quarter, the company reported revenues almost $3 billion above guidance, and guided for $8 billion of sequential growth. It therefore does not feel like there has been a deceleration.
This is why he believes there will be $2 billion or more of upside to the $64 billion guidance, adding that a consensus revenue estimate of $72 billion feels safe.
