NVIDIA (NASDAQ: NVDA) is set to report earnings on May 22nd. Anticipation is high. Last NVIDIA earnings CNBC even ran a “countdown clock” leading into the company’s earnings release, and their first-quarter earnings will be just as closely followed. With NVIDIA being something of a bellwether stock in the AI space, its earnings have the potential to shape the direction of an entire segment of the market in the days and weeks following its report. So, what should you expect come May 22? We dive into the key factors to watch and what numbers NVIDIA needs to deliver to exceed loft expectations.
What To Watch For When NVIDIA Reports
The important numbers to keep in mind when NVIDIA reports earnings this week are:
- Wall Street Average Revenue Estimates: $24.5 billion
- Wall Street GAAP Net Income Estimates: $12.8 billion
That revenue number would represent an 11% sequential jump from last quarter on the revenue side. However, it’s likely if NVIDIA simply matched these expectations it would fall. You’ll often hear about “whisper” numbers when stocks that have been rising report earnings. These are guesses at what the real expectations for a stock are. In the case of NVIDIA, which has been rising strongly in recent weeks and is near all-time highs, it’s like the real expectations around its earnings report are higher.
That’s not impossible, UBS issued a research note last week that speculated NVIDIA’s revenue in the first quarter could go as high as $26 billion. Perhaps even more important is the estimates for next quarter. Currently, Wall Street estimates average at $26.7 billion in revenue, which continues the sequential growth (and momentum) of NVIDIA’s results. UBS estimates that NVIDIA could guide to $27 to $28 billion in revenue next quarter.
If NVIDIA hits the high end of UBS’ estimates ($26 billion in the first quarter and a guide to $28 billion next quarter), that would almost surely be strong enough for the stock to rise following its earnings, even with NVIDIA’s recent rise.
However, the bigger area to watch for when NVIDIA reports is commentary on the back half of the year. Right now NVIDIA lead times are coming down as they’re preparing their next-generation Blackwell chips. Reports out this week have AMD and NVIDIA booking all of Taiwan Semiconductor’s advanced packaging for the foreseeable future, which speaks well to demand trends. Other reports from Taiwanese media have NVIDIA preparing to produce 40,000 GB200 servers in 2025. With those servers selling for up to $3 million each, production at that level would likely lead the company to exceed already bullish Wall Street expectations.
The key point: any disclosure from NVIDIA that raises expectations for 2025 and into 2026 will matter far more in how the stock reacts in the weeks and months to come. While NVIDIA has lofty expectations for the first and second quarters, demand for NVIDIA’s upcoming Blackwell chips will shape how the stock performs across the next 12 months.
Transcript:
Eric, let’s look at Earth’s most popular AI company, perhaps Earth’s most popular company, period, right now, and that’s NVIDIA.
They’re reporting earnings on May 22nd. That’s just a few days away.
What are we looking at? Are we looking at a monster blowout? Are we looking at a monster drop? What are you predicting? Understanding that this is the most followed and most exciting company on Earth right now.
Yeah, when you look at NVIDIA earnings, their last earnings CNBC was doing a countdown to the announcement. It feels like this is the Super Bowl of investing right now.
So I wanted to talk with investors about the numbers that you need to know headed into earnings. And that’s the estimates from Wall Street.
According to S&P Capital IQ, Wall Street is looking for revenue in the prior quarter of $24.5 billion and GAAP net income of $12.8 billion.
This is kind of the measuring stick from which NVIDIA will be judged now.
How good are those numbers? Well, it’s 11% sequential growth from last quarter on the revenue side.
I would say the market is probably, you’ll hear about whisper numbers, expecting a little higher number than that just because you’ve seen NVIDIA shares running near all-time highs heading into earnings.
So what’s the news and what are we looking at with earnings?
Well, UBS put out a research note just this week saying they think NVIDIA revenue could go as high as $26 billion, which would be higher than those Wall Street numbers, surpassing expectations.
And next quarter, Wall Street is expecting NVIDIA to guide towards $26.7 billion in sales. And UBS thinks Nvidia could be an upside of $27 to potentially $28 billion.
So again, if those numbers came to pass, I think you’d see NVIDIA shares perform very well in the weeks ahead. I don’t think that would be a disappointment at all to Wall Street, but…
What really is going to matter is what kind of commentary management shares, because we’re seeing a lot of the supply constraints for the prior generation of GPU chips come down, and we’re starting to focus ahead on the launch of NVIDIA’s next generation of chips, which is named Blackwell.
We’ve got some positive news that’s come out about Blackwell chips with Taiwanese media reporting NVIDIA might be making up to 40,000 GB200 servers in 2025.
These servers cost up to $3 million each. So we’re looking at potentially revenue just from these servers of somewhere in the neighborhood of $80 billion to $120 billion next year.
We’re going to see the commentary from NVIDIA’s management about revenue from these next-generation chips. If they do anything to move up revenue expectations for 2025 or 2026, that’s where we could see the potential big reaction and upside to NVIDIA shares.
So if you’re looking at NVIDIA, watch for those numbers for this quarter and next. But keep in mind the big picture, which is going to be what the company says about Blackwell demands.
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