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Nvidia Earnings Preview: Here's Where Earnings and Revenue Are Likely to Come In At

Chris MacDonald

Published: November 20, 2024 12:35 pm

Nvidia’s (NASDAQ:NVDA) highly-anticipated fiscal 2025 Q3 results are set to be released on Nov. 20, and investors are eagerly awaiting these numbers to assess where this top AI beneficiary will be headed in the coming weeks.

Following a series of strong earnings reports, this particular report will provide plenty of indications to investors as to where Nvidia’s growth profile stands, and if the company’s release of new Blackwell chips will drive the kind of growth the market has priced into the stock. Up to now, Nvidia has continuously blown the cover off of earnings expectations, and raised its forward guidance in a fashion that can only be described by investors as magical. 

I’d expect to see a similar report this quarter, given the previous 80% increase to revenue projections the company laid out for its Q3 report driven by strong Hopper GPU demand. On this report, analysts raised their EPS estimates to $0.74 per share, reflecting a 85% increase. Additionally, these analysts set a consensus $156 price target, implying 10% upside from the current $142 per share level the stock trades at.

Let’s dive into whether this growing optimism is well-placed, or if Nvidia could fall on its face following this earnings report. 

Key Points About This Article:

• Nvidia is set to report earnings on Wednesday, and all eyes are on where this stock could be headed in tomorrow’s session.
• Here’s what analysts think the upcoming report will highlight, and what the company will need to do to see another post-earnings boom.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Earnings Continue to Overheat

The S&P 500’s 25% rally this year owes much to growth stocks like Nvidia, which dominates the AI chip market with an 80% share. Nvidia’s triple-digit earnings growth and “insane” product demand have fueled a nearly 200% stock surge in 2024. With fiscal 2025 Q3 earnings set for Nov. 20, investors await results amid a potential transition as Nvidia readies its Blackwell architecture.

Nvidia, holding over 80% of the AI accelerator market, is crucial to modern AI. Most analysts have noted this, and I expect the narrative around the company will remain the same. Nvidia has continued to ramp up production of its Blackwell GPUs this quarter, with CEO Jensen Huang calling it Nvidia’s most successful launch yet. Demand is so high that orders are already booked for 12 months. Nvidia is expected to provide optimistic guidance during the Nov. 20 earnings call, potentially boosting its stock.

Nvidia Is Still the King of GPUs

Nvidia’s GPUs, renowned for their quality, drive high demand despite premium pricing and wait times. Offering a broad AI portfolio across all public clouds, Nvidia has consistently reported record revenues, with data centers contributing 87% of its $30 billion in the latest quarter—exceeding its full-year revenue from two years ago. With gross margins surpassing 70%, Nvidia remains highly profitable. As it transitions to Blackwell production in Q4, Q3 revenue is expected to show double-digit year-over-year growth, reflecting a slower pace after recent triple-digit increases.

Concerns over slower growth or potential challenges during the Blackwell rollout may weigh on Nvidia stock after Nov. 20. However, Nvidia’s strong earnings track record and CEO Jensen Huang’s remarks about “insane” Blackwell demand suggest optimism. Customer comments, including Oracle’s Larry Ellison and Tesla’s Elon Musk, highlight urgent GPU needs, while Taiwan Semiconductor’s recent double-digit revenue growth signals robust chip demand. These factors point to positive news that could boost Nvidia’s stock post-earnings.

Nvidia Stock Still Looks Like a Buy

While positive news can sometimes lead to stock declines if gains are already priced in, Nvidia’s long-term prospects remain strong. Its market leadership, financial strength, and innovation make it a solid AI investment, regardless of short-term performance after Nov. 20.

Moreover, Nvidia’s major cloud clients, including Alphabet, Amazon, Meta, and Microsoft, are increasing AI-driven spending, boosting demand for its products. Nvidia’s vertical integration and data center design offer cost advantages, securing its market lead. Analysts expect strong Q3 guidance, potentially driving stock gains post-Nov. 20.

We’ll have to see what the company ultimately announces, but I’m bullish on the potential trajectory of this stock. For now, Nvidia remains a strong buy in my books, until the company provides something that may lead investors to change their minds.