- Q2 earnings will be AI’s biggest test in latest earnings season
- Guidance sharply raised at end of Q1
- Stock up 200%-plus this year but stalled recently
Investors have become obsessed with AI (artificial intelligence) and its potential to make fortunes in the future, setting up Nvidia’s (NVDA:NASDAQ) second quarter earnings as the biggest test this earnings season.
The chips designer reports Q2 to 31 July 2023 after the closing bell on 23 August and analysts already expect a lot after the company blew away Wall Street’s expectations for Q2 guidance during its Q1 earnings call.
At the time, analysts were anticipating revenue of $7.2 billion, but Nvidia said it will bring in around $11 billion in the quarter, a 64% jump on last year. The one big weak spot was the gaming division which was hit by the weaker macro-economic backdrop.
| What analysts expect from Nvidia |
| Q2 2024 | FY 2024 |
| EPS | Revenue (bn) | EPS | Revenue (bn) |
| $2.09 | $11.1 | $8.17 | $44.3 |
| Source: Koyfin |
Investors should watch for signs of improvement in gaming, but it is AI appetite that will dictate if expectations can be matched or bettered. Currently, companies of all shapes and sizes are doing everything they can to get their hands on Nvidia chips. During Tesla’s (TSLA:NASDAQ) Q2 earnings call, Elon Musk told analysts that the automaker will take as many Nvidia graphics processors as the company can produce.
Nvidia’s stock is up more than 200% year to date yet it has plateaued over the past couple of months at around the $430 level ($432.99 last close).
