NVIDIA’s Big Moment: Stock Market Awaits Earnings Surge and Future Outlook

Wall Street’s leading beneficiary of generative artificial intelligence (AI), Nvidia, is counting down to its earnings announcement.

Nvidia will announce its earnings right after the market closes at 4 p.m. on the 21st (6 a.m. Korean time on the 22nd).

◇ Forecasted 240% increase in sales and 600% surge in earnings per share: Wall Street estimates earnings per share (EPS) at $4.60 and sales at $20.5 billion. This represents a staggering 600% and 240% increase, respectively, compared to last year.

Analysts for Nvidia predict that revenue from the data center segment will have surged 377% to $17.2 billion from $3.62 billion in the same quarter last year.

This is due to the tremendous demand for AI-dedicated chips. For example, Meta, the parent company of Facebook, announced in January that it will build an AI data center equipped with 350,000 of Nvidia’s flagship AI-dedicated H100 chips by the end of 2024. This shows how American big tech companies are eager to secure AI-dedicated chips.

As a result, revenue from the data center segment is expected to have increased the most.

The gaming segment is expected to have generated $2.7 billion in revenue. Last year, it was $1.8 billion.

◇ Outlook more critical than earnings: What’s even more important is the outlook for the next quarter.

Jensen Huang, CEO of Nvidia, is expected to hint about the next quarter’s earnings in the announcement on the day.

Even mentioning that supply will be tight due to high demand until the end of the year could send Nvidia’s stock price soaring.

◇ Successive upward revisions of target prices: As of the 20th, Nvidia’s stock price is $694.

However, before Nvidia’s earnings announcement, investment institutions are raising their target prices consecutively.

UBS has raised its target price from $580 to $850, and Stifel has adjusted its target price from $665 to $865. Wedbush Securities also raised its target price from $600 to $800.

◇ There are risks, such as in China: Nvidia’s clients are developing AI-dedicated chips to reduce their dependence on Nvidia.

Microsoft (MS), Amazon, Google, Meta, Tesla, and others are pushing to develop AI chips.

The United States addresses concerns over China’s advancing AI technology capabilities by implementing export restrictions on Nvidia’s products to China.

sinopark@news1.kr