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Nvidia earnings preview: Here's what Citi, Piper Sandler analysts expect to see

Published 2024-05-17, 04:56 a/m
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Nvidia (NASDAQ:NVDA) is set to report its fiscal first-quarter 2025 earnings after the closing bell on Wednesday, May 22.

Investors will be mainly focusing on growth trends in Nvidia’s data center segment and any updates on the recently announced Blackwell platform.

Wall Street analysts project Nvidia's revenue to reach $24.65 billion for Q1 FY2025, up from the previous quarter and more than tripling from the year-ago period, according to consensus estimates by Visible Alpha.

Net income is expected to soar to $12.87 billion, notably higher than the $2.04 billion profit recorded a year ago and up from the final quarter of FY2024. On a per-share basis, diluted earnings are anticipated to be $5.17, a sharp increase from 82 cents in the year-ago period.

However, a key focus in Nvidia's upcoming earnings report will be its data center segment. Nvidia has positioned itself as an early beneficiary of the AI boom, leading to rapid growth in this division. The unprecedented demand for Nvidia's advanced computing chips, which are specialized for running AI workloads, has significantly driven this expansion.

Citi analysts project Nvidia's April quarter total and data center sales to be $24 billion and $21 billion, respectively, in line with expectations. They believe buy-side estimates are higher at approximately $26 billion for total sales and $23 billion for data center sales.

For the July quarter, Citi models total sales of $27.5 billion, compared to the Street's estimate of $26.5 billion and buy-side expectations of around $28 billion.

“We expect smaller beats vs the prior few quarters on larger numbers, shorter H100 lead times, and gross margin normalization before GB200 volume ramps in 1H25,” analysts at the Wall Street giant said in a note.

“Going into earnings, we believe investors are focused on a) GB200 ramp/pipeline, b) potential air pocket in AI demand in 2H24, c) B200’s impact on LT gross margins, d) power constraints on AI data center rollouts, and e) sovereign AI & China H20 demand,” they added.

Meanwhile, in their pre-earnings report, Piper Sandler analysts said they continue to see strong demand for Nvidia’s data center products and believe the company is poised for another “beat-and-raise quarter.”

“Demand for Hopper GPUs remains strong with supply still working to catch up to demand as the product is still on allocation. Our checks indicate that demand for the Blackwell GPU series is also set to be strong across NVDA’s data center customer base,” they noted.

In terms of results, Piper Sandler's bull case suggests that Nvidia's total revenues could surpass current expectations by $1.5 billion to $2.0 billion for April, with a similar beat anticipated for July. Should that happen, the investment firm expects Nvidia stock to be flat or slightly up after the print’s release due to high investor expectations.

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