Nvidia (NVDA) earnings have become one of Wall Street's most-anticipated events. Indeed, who can forget when the company gave jaw-dropping forward guidance in May 2023 thanks to snowballing demand for all things artificial intelligence (AI) – sending the chipmaker catapulting north of a $1 trillion market cap.
For the company's fiscal third-quarter results, due after the close next Wednesday, November 20, analysts tracked by S&P Global Market Intelligence are expecting earnings to rise 85% year over year to 74 cents per share and revenue to jump 82% to $32.9 billion.
Read on as Kiplinger experts share the news surrounding Nvidia earnings as well as our analysis.
Increased AI spending will continue to benefit Nvidia, says UBS
UBS Global Research analyst Timothy Arcuri lifted his price target on Nvidia on November 10, to $185 from $150 – representing implied upside of more than 25% to current levels.
Arcuri expects the chipmaker to report strong results and guidance this time around, though he anticipates a decline in gross margin, to 73% from 75.1% in Q2.
The analyst believes that capital expenditures from large-scale data centers will continue to improve and he expects the gap between incremental hyperscaler spending and Nvidia's incremental data center revenue to close over the next 12 months.
"On top of this, sovereign AI represents a major demand vector for NVDA (already worth more than $10 billion in calendar year 2024) with each of the large sovereigns (particularly in the Middle East) looking to us like their spending could approach that of a big U.S. hyperscaler over the next few years," Arcuri adds. India, for one, unveiled a $1.2 billion budget for AI projects in March.
- Karee Venema
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This will mark Nvidia's first time reporting as a Dow Jones constituent, with the semiconductor stock joining the 30-stock index back on November 8.
NVDA shares are well known for their post-earnings volatility, which could have an impact on the price-weighted Dow. Most recently, the stock sank more than 6% in August after its fiscal Q2 results and jumped 9% in May following its fiscal Q1 report.
However, as Dan Burrows, senior investing writer at Kiplinger.com, explains in his feature, "Nvidia Stock Is Joining the Dow. Is It Time to Buy?," NVDA and its $3.6 trillion market valuation will likely have a larger impact on the cap-weighted S&P 500 and Nasdaq Composite.
Indeed, based on its current share price of roughly $150, "NVDA stock will be as important to the DJIA as, roughly, 3M (MMM)," he writes.
- Karee Venema
