Nvidia earnings are going to have to rise above already soaring expectation
Wall Street expects that revenue will be up to $33 billion this quarter, and the numbers just go up from there.
As Luke mentioned, Nvidia’s earnings report after the close of trading Wednesday represents one of last big hurdles the market faces as the end of 2024 rapidly approaches.
At this point, the company’s dominance in having the must-have GPUs of the current AI-investment boom is beyond dispute.
But now the question is whether CEO Jensen Huang can keep producing results that exceed the insanely high expectations for the company, and for how long.
Wall Street forecasters expect that Q3 will be up over 80% to $33 billion, with profits rising nearly 90% to $17.45 billion, per consensus estimates produced by FactSet.
But looking out even further, these estimates seem to be extrapolating an endlessly smooth upward incline for both the top and bottom line.
And those are just the official estimates produced by fundamental analysts who are looking closely at the financials. (The good folks at Chartr point out that Nvidia has bested those numbers for the last seven straight quarters.)
But there’s an argument to be made that the horde of retail holders of Nvidia stock is likely less disciplined in its thinking, meaning that true sentiment around the stock is even more euphoric that estimates can convey.
So far, that optimism has more than paid off, as the explosion in Nvidia’s share price last year — which at one point gave it an insane valuation of more than 250x the previous year’s earnings — proved pretty well justified by the profits the company has produced.
But as the ever-rising estimates suggest, the prize for Nvidia’s remarkable performance — besides the crown as the largest public company, and the $2.3 trillion (!) in market wealth the company has created over the last year — will be ever-higher expectations. Poor Jensen. (Though, not that poor.)
