NVIDIA's earnings report this week will be good, but investors are more concerned about the March GTC conference
NVIDIA will release its quarterly earnings report after the U.S. stock market closes on February 25, with market expectations of revenue at $66.1 billion and earnings per share at $1.54. Analysts are generally optimistic but believe that impressive data may not necessarily drive the stock price up, with the real catalyst possibly being released at the March GTC conference. This year, NVIDIA's stock price has only increased by about 2%, significantly lagging behind the Philadelphia Semiconductor Index's 16% increase during the same period
NVIDIA is about to announce its quarterly earnings report, and market expectations are generally optimistic. However, analysts believe that the stock price reaction may still be muted, with the real catalyst possibly waiting until the NVIDIA GPU Technology Conference (GTC) in March.
After the U.S. stock market closes on February 25, AI supergiant NVIDIA will release its latest earnings report, with the earnings call scheduled for 2:00 PM Pacific Time on February 25, which is 6:00 AM Beijing Time on February 26.
David O'Connor, an analyst at BNP Paribas, expects the tone of the earnings report to be "quite positive," but bright numbers may not necessarily drive a significant rise in stock prices. He believes that NVIDIA may reserve the most market-impacting information for disclosure at the March GTC conference.
NVIDIA's stock price has only increased by about 2% this year, far behind the Philadelphia Semiconductor Index's 16% increase during the same period. The competitive landscape for AI chips, rising costs of memory chips putting pressure on gross margins, and the capital expenditure trends of large-scale cloud providers are several core issues that investors are focusing on this earnings season.
Performance Expectations are Steady, but the Market May Have Already Digested Them
According to FactSet's comprehensive forecast, NVIDIA's adjusted earnings per share for the fourth quarter are expected to be $1.54, with revenue expectations of $66.1 billion, including $60.7 billion from the data center business. The full-year revenue expectation is $213.8 billion, with first-quarter revenue guidance of $72.9 billion.
The problem is that strong performance data in recent quarters has repeatedly failed to boost stock prices. Market expectations for NVIDIA are already quite full, and the room for exceeding expectations is narrowing. O'Connor believes that investors' attention has already shifted to the March GTC conference.
This earnings report is also seen as a health check on AI infrastructure investment.
Andrew Rocco, a stock strategist at Zacks Investment Research, stated that NVIDIA's performance will provide a reference for assessing the health of AI spending, while also revealing the operational status of emerging cloud computing partners like CoreWeave and Nebius Group.
Gross Margin and Competition are Key Issues
O'Connor pointed out that with the continuous rise in memory chip prices, whether NVIDIA can maintain its gross margin under increasing cost pressures will be one of the focal points of the earnings call.
Another issue is competition. Custom chip projects like the Tensor Processing Unit (TPU) jointly developed by Google and Broadcom are receiving increasing attention, and the market is beginning to question whether NVIDIA's long-term dominance can be sustained.
HSBC analyst Frank Lee expects NVIDIA's GPU demand to remain strong. Alphabet, Amazon, Meta, and Microsoft have a combined spending plan of $650 billion on AI infrastructure this year, which itself indicates the scale of demand Frank Lee believes that NVIDIA GPUs will remain the mainstream choice for AI computing power in the foreseeable future. However, how long "the foreseeable future" is, no one can provide a definitive answer
