Artificial intelligence giant Nvidia (NVDA) will report its second-quarter earnings after the close of trading on Wednesday. Nvidia’s announcement — the most anticipated results of the quarter — will send ripple effects throughout the tech sector as investors look for signs that AI trading will continue to dominate market conversations in the second half of the year.
Nvidia shares are up more than 163% so far this year and 60% over the past six months. Shares of rival AMD are up 9% so far this year and down about 14% over the past six months.
Intel (INTC) shares have collapsed 57% since the beginning of the year and are down 53% over the past six months as the company continues to struggle amid its massive turnaround efforts.
NVIDIA is expected to report adjusted earnings per share (EPS) of $0.65 on revenue of $28.7 billion. This represents a 139% increase in EPS and a 113% increase in revenue compared to the same period last year when NVIDIA reported adjusted EPS of $0.27 on revenue of $13.5 billion.
Nvidia is the world’s leading AI chip and software designer, controlling between 80% and 95% of the market, According to ReutersIt is expected to continue to maintain this lead as the next generation of Blackwell chips rolls out.
While Information Despite reports of a potential delay in Blackwell shipments, analysts at firms including Goldman Sachs, Key Bank, and Loop Capital don’t see this as a major concern for Nvidia in the near term.
Our work suggests that while Blackwell is in fact late, as we first wrote about in [Aug. 8]It might be more like 120 days versus 90 days… although that might not matter much. [1)] TSMC’s Hopper Yield Continues to Improve [2)] “The amount of Hopper production increase during the fall could outweigh the amount of Blackwell production lost due to the push,” Ananda Baruah, managing director of Loop Capital, said in a note to investors.
Nvidia’s critical data center business is expected to generate $24 billion in revenue during the quarter, up 142% from the $10.3 billion the sector saw in the same quarter last year. Wall Street expects Nvidia to not only beat second-quarter expectations but also raise its third-quarter outlook, which could be helped by TSMC’s recent earnings beat. TSMC makes chips for Nvidia.
However, this jump in data center growth is lower than the 426% revenue growth in the previous quarter and 408% in the fourth quarter of last year.
This growth is expected to slow further in the third quarter, when the company is expected to generate $27.7 billion in data center revenue, a 91% increase year-over-year.
“We think Nvidia will generate close to $30 billion in data center revenue in October. So, you know… the law of large numbers.” [is] “We are here, but we again believe that the profitability of the company will continue to grow,” Stifel Managing Director Robin Roy told Yahoo Finance on Monday.
Nvidia’s competitors aren’t resting on their laurels either. Last week, AMD announced that it is acquiring ZT Systems. In a deal worth $4.9 billion, the move gives AMD more muscle to build AI servers, which has been a major driver of Nvidia’s sales.
While this may give AMD a boost in sales, it doesn’t mean Nvidia will face any major threats to its reign as AI king anytime soon.
“There are emerging competitors like AMD that are starting to take a small share of the market, but when we look at the overall infrastructure spending cycle… which we think will continue to increase, Nvidia looks to us best positioned to take advantage of that,” Roy said. [spending]”.”
In addition to AI revenue, gaming revenue is expected to reach $2.7 billion. Gaming, once the main source of NVIDIA revenue, is now a much smaller part of the NVIDIA story. However, this segment is much larger than NVIDIA’s other business segments including professional visualization and automotive.
Email Daniel Howley at [email protected]. Follow him on Twitter at @Daniel Hawley.
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