Nvidia Stock Earnings Forecast: What To Watch

21 Aug 2023

Nvidia, a chip producer without its own manufacturing facilities, will disclose its financial performance for the second quarter of fiscal year 2024 on August 23. This report is receiving a lot of attention from the financial industry. Keep reading to learn about the specific measures to monitor, how to obtain the report, and the anticipated figures predicted by analysts for Nvidia.

Nvidia's Stock Metrics Unveiled

Nvidia faced significant difficulties in the fiscal year of 2023. The abrupt decline in the desire for gaming chips posed considerable challenges for the company, resulting in reduced revenues, excessive stock, and diminished gross profit margins.

The blog post indicates that the financial performance in the initial quarter of fiscal year 2024 demonstrated progress compared to the previous quarter. The forthcoming release of second quarter earnings will determine whether this favorable trajectory continues or comes to an end. The majority of analysts anticipate positive results for the second quarter, which would be a positive indicator for both Nvidia and the artificial intelligence (AI) industry as a whole.

Nvidia stands as the leading provider of graphics processing units (GPUs) that fuel generative AI software such as ChatGPT and Google Bard. The data center division of Nvidia, encompassing its AI chips, has exhibited resilience and progress. Should these patterns persist, Nvidia could become the pioneering large-scale company to profit significantly from the AI revolution.

Thus, this financial report has the potential to convey two significant messages. Initially, it will indicate whether Nvidia has successfully overcome the challenges it encountered during the 2023 fiscal year. Additionally, it has the potential to shed light on the economic significance of artificial intelligence.

Key performance indicators to monitor include the following.

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Nvidia's Past Earnings: What Happened?

During the initial three months of fiscal year 2024, Nvidia disclosed a total earnings of $7.19 billion, with a non-GAAP gross margin of 66.8% and a non-GAAP diluted EPS of $1.09. Impressively, this outcome surpassed the predictions made by analysts. The financial experts on Wall Street had projected a revenue of $6.52 billion and a non-GAAP diluted EPS of $0.92.

Compared to previous records, these top-level metrics for the first quarter recorded decreases in comparison to the same time last year but displayed advancements when compared to the previous quarter. To be more precise:

Taking a closer look at the specific measurements in this category, the income generated from gaming witnessed a growth of 22% compared to the previous quarter. However, in a comparison between this year and the previous one, it experienced a decline.

In the industry of data center operations, there was a significant increase in demand for Nvidia's artificial intelligence chips, leading to a noteworthy 14% surge in revenue compared to the previous year, amounting to $4.28 billion. This outcome exceeded the general agreement or expectations within this field.

Following the announcement of Nvidia's earnings for the first quarter, the company's shares experienced a significant increase of 26% during the extended trading session.

When Is Nvidia's Next Earnings Report?

Nvidia is scheduled to release its financial report for the second quarter of the fiscal year 2024 on Wednesday, August 23, 2023 at 4:20 p.m. ET. Visit Nvidia's investor website at that specific time to access the earnings summary and read CFO Colette Kress’ written analysis of the quarterly outcome.

The business will hold a webcast at 5 p.m. ET, during which they will deliver prepared statements and answer inquiries from analysts and institutional investors. This webcast will be open to the general public in a listen-only format via the company's investor website.

Industry experts anticipate that Nvidia will announce significant increases in both revenue and earnings per share (EPS). The general agreement among analysts is that the revenue will reach $11.1 billion, a remarkable surge from $6.7 billion in the same quarter of the previous year. This means a staggering 65% growth in sales when compared to the preceding year.

The projected revenue, based on general agreement, is in line with the company's forecast for the second quarter, which was disclosed in May. During that period, the company anticipated generating revenue between $10.78 billion and $11.22 billion.

According to the general agreement, the estimated earnings per share (EPS) for the second quarter are projected to be $2.07. This would indicate a significant boost of 305% when compared to the EPS result of $0.51 achieved in the second quarter of 2023.

Keep in mind that the outcome of $0.51 in the previous year's quarter was quite unexpected, and unfortunately, it wasn't favorable. The anticipated average estimate was $1.25 for that quarter, but it dropped significantly to just $0.50. The company had cautioned Wall Street two weeks prior to the official announcement that both revenue and EPS would be lower than expected due to weak demand for gaming chips.

In spite of those difficulties, Nvidia remains a efficiently managed corporation with a promising outlook, partly due to its early involvement in the AI industry. As per Allied Market Research, the worldwide AI market is expected to witness a compound annual growth rate (CAGR) of 38% from 2021 to 2030.

However, the obstacle lies in Nvidia's worth. The present stock price and the previous 12 months of profits correspond to a P/E ratio of approximately 222. This figure exceeds the company's average P/E over the past five years, which stands at 73. Investors are anticipating more robust earnings in the future, yet even the anticipated P/E ratio surpasses Nvidia's average by over 30%.

The high numbers suggest a strong demand and strong position in AI chips, but these claims have yet to be proven. The expanding AI market will certainly attract more rivals, and if Nvidia fails to meet the demand, these competitors may gain momentum. This is one potential reason why long-term investors should wait for a lower price on Nvidia.

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Does NVDA Stock Rise After Earnings?

Nvidia's shares have experienced an increase in value following three out of the four recent financial reports. The most substantial surge occurred after the announcement of their first-quarter results in May. On the other hand, the smallest growth, approximately 4%, was observed twelve months ago when Nvidia achieved an earnings per share (EPS) of $0.51, slightly surpassing the adjusted market consensus of $0.50.

The value of NVDA shares declined by 1.47% following the release of the company's financial report for the third quarter of fiscal year 2023. The reported earnings stood at $0.58, falling short of analysts' projections of $0.70.

Please keep in mind that these percentages indicate the stock's changes immediately after the earnings report. Taking a wider perspective reveals a contrasting narrative. NVDA reached its highest point at $330 in November 2021 but declined to below $110 by October 2022. However, since then, the semiconductor stock has predominantly experienced an upward trend, contributing to its exceptionally high P/E ratio.

This is where the timeless saying about investing comes into play: Previous achievements do not ensure future outcomes. Even though the stock usually increases following its earnings announcements, you shouldn't interpret that as a reliable prediction for Nvidia stock.

It is anticipated that Nvidia will likely release a favorable financial report for the second quarter. Instead of focusing solely on general figures, examine how each segment has performed. A robust data center income, consistent gaming revenue, and steady gross margins will indicate that the company is overcoming its fiscal-year 2023 challenges and benefiting from being at the forefront of AI technology.

Monitor the company's worth carefully moving forward. Although Nvidia holds a promising position in the field of artificial intelligence, it is crucial to acknowledge that competition in this area will intensify. Therefore, ensure that the price of your investment aligns with this reality.

Common Questions About NVDA Stock Earnings

When Is Nvidia's Next Earnings Report?

Nvidia is scheduled to announce its financial performance for the second quarter of fiscal year 2024 on Wednesday, August 23, 2023. The key achievements of this quarter, along with detailed commentary, will be accessible on the company's investor website at 4:20 p.m. Eastern Time (ET). Additionally, the public will have the opportunity to listen to the webcast, which will feature planned speeches regarding the quarterly outcomes, as well as a Q&A session with analysts and institutional investors. The webcast is slated to commence at 5 p.m. ET.

Where Does Nvidia Report Earnings?

Nvidia releases its financial report along with its analysis and insight on its dedicated platform for investors, located at investor.nvidia.com.

Can You Hear Or See Nvidia's Earnings Call?

Certainly, you have the option to tune in to Nvidia's earnings call. However, only analysts and institutional investors have the privilege to pose inquiries following the initial statements. You can access the call via Nvidia's investor website at investor.nvidia.com.

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