Microchip designer Nvidia is expected to report a 53% jump in fourth quarter (Q4) revenues from the year-ago quarter on 16 February 2022 as chip demand for all thing electronics continues to outstrip supply.
Yet cost pressures are likely to be telling with analysts anticipating a sharp fall from the firm’s record-breaking adjusted earnings per share of $3.10 in February 2021.
Nvidia beat Wall Street estimates for both revenues and earnings in every quarter last year, and with the protracted acquisition of the UK’s chip designs champion ARM having failed, investors will be looking hard at commentary on continuing demand for its core business segments.
Particularly in focus will be its data centre unit, which could be the make or break for the shares. In the third quarter data centre revenue grew 55% year-over-year.
AI & CLOUD GROWTH
A steer over longer-run growth markets, such as the metaverse and artificial intelligence will also be closely watched. Fund manager fans of the stock see Nvidia as a crucial leader when it comes to accelerating the evolution of artificial intelligence with silicon chips that power the next phase of computing.
While the company remains best-known for its graphics chips expertise that make gaming increasingly realistic and popular, it’s the explosion of cloud computing in recent years has seen Nvidia’s premium processors increasingly adapted by the major cloud service providers, such as Amazon Web Services, Google Cloud Platform and Microsoft Azure.
The stock has been on a two-year tear, rallying from around $50 in March 2020 to a record $333.76 in November 2021. But like almost everything tech, the share price has come under heavy selling pressure as investors fret over global inflation and monetary tightening.
Consensus points to earnings per share of $1.22 on revenue of $7.41 for Q4 to 31 January 2022.
