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Nvidia earnings, revenue expected to surge first quarter as AI trade faces latest test

Nvidia (NVDA) is set to report its first quarter results after the bell on Wednesday in what will be one of the most important reports for investors this year.

Wall Street expects Nvidia to report revenue and earnings up more than 200% and 400%, respectively, from the year-ago period, as the company experiences a surge in demand for its chips in the context of the AI ​​boom.

Analysts expect adjusted earnings per share of $5.65 on revenue of $24.69 billion, according to Bloomberg data. The company reported adjusted EPS of $1.09 on revenue of $7.19 billion in the same quarter last year.

Nvidia stock has been on a strong run over the past year, rising more than 200%. The stock is up nearly 700% since the stock market lows of October 2022. Shares closed at a record high on Tuesday.

The vast majority of Nvidia’s revenue will come from its Data Center business, which is expected to bring in $21 billion, up from $4.28 billion in the first quarter of last year.

The company’s Gaming division, once its largest segment, is expected to generate revenue of $3.5 billion, up from $2.24 billion in the same quarter last year.

Ahead of Nvidia’s earnings announcement, Stifel analyst Ruben Roy raised his price target on the company’s stock from $910 to $1,085, saying he expects what Nvidia is once again beating earnings and results expectations and raising its guidance for the next quarter.

Demand for its chips from hyperscalers like Amazon (AMZN), Google (GOOG, GOOGL), Meta (META), Microsoft (MSFT) and others has boosted the company’s results, making the report Wednesday a key check on the industry’s appetite for more AI. investment.

And as Yahoo Finance’s Josh Schafer reported Tuesday, AI trading has crossed tech boundaries, with investors turning to energy and power companies as derivatives on the AI ​​boom. AI.

But Roy, like analysts at BofA Global Research and Loop Capital, says near-term concerns remain about how the transition from Nvidia’s current Hopper line of AI chips to its Blackwell line will impact overall sales.

The fear is that customers will hold off on some of their orders for Hopper chips while they wait for Nvidia to roll out its more powerful Blackwell products. The Financial Times reported on Tuesday that Amazon had suspended some Nvidia orders while waiting for the more advanced Blackwell line to become available. Amazon later clarified that it had not halted any orders from Nvidia, but rather had shifted an upcoming supercomputer project to Blackwell chips.

Loop Capital’s Ananda Baruah argued that it’s possible Nvidia won’t let companies pause their Hopper orders without losing their place in the queue to buy Blackwell chips. If enough customers pause their orders in favor of Blackwell chips, Nvidia could experience a temporary quarter-over-quarter decline in sales.

NVIDIA CEO Jensen Huang demonstrates products on stage during the annual Nvidia GTC artificial intelligence conference at the SAP Center in San Jose, California, March 18, 2024. (Photo by JOSH EDELSON / AFP) (Photo by JOSH EDELSON/AFP via Getty Images)NVIDIA CEO Jensen Huang demonstrates products on stage during the annual Nvidia GTC artificial intelligence conference at the SAP Center in San Jose, California, March 18, 2024. (Photo by JOSH EDELSON / AFP) (Photo by JOSH EDELSON/AFP via Getty Images)

NVIDIA CEO Jensen Huang demonstrates products on stage during the annual Nvidia GTC artificial intelligence conference at the SAP Center in San Jose, California, March 18, 2024. (JOSH EDELSON/AFP via Getty Images) (JOSH EDELSON via Getty Images)

Nvidia also faces the threat of customers building their own AI chips in-house.

So far, Amazon, Google and Microsoft are using – or working on – their own AI chips that offer better power efficiency than Nvidia’s offerings.

That doesn’t mean these companies will completely abandon Nvidia’s chips, although the push toward their own products could reduce the chip giant’s market share. AMD (AMD) and Intel (INTC) are gaining ground when it comes to their own AI chips.

On Tuesday, Microsoft announced at its Build conference that it would begin offering AMD’s MI300X chips to developers looking to train and deploy AI models. The Windows maker, however, was also careful to point out that it also uses Nvidia’s chips.

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Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @DanielHowley.

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News Source : finance.yahoo.com
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Sara Adm

Aimant les mots, Sara Smith a commencé à écrire dès son plus jeune âge. En tant qu'éditeur en chef de son journal scolaire, il met en valeur ses compétences en racontant des récits impactants. Smith a ensuite étudié le journalisme à l'université Columbia, où il est diplômé en tête de sa classe. Après avoir étudié au New York Times, Sara décroche un poste de journaliste de nouvelles. Depuis dix ans, il a couvert des événements majeurs tels que les élections présidentielles et les catastrophes naturelles. Il a été acclamé pour sa capacité à créer des récits captivants qui capturent l'expérience humaine.
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