Leading designer of graphics chips Nvidia (NASDAQ:NVDA) will be reporting earnings tomorrow after market close. Here’s what to look for.
Nvidia beat analysts’ revenue expectations by 6% last quarter, reporting revenues of $26.04 billion, up 262% year on year. It was an exceptional quarter for the company, with a significant improvement in its gross margin and an impressive beat of analysts’ EPS estimates.
Is Nvidia a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Nvidia’s revenue to grow 113% year on year to $28.73 billion, improving from the 101% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.64 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Nvidia has a history of exceeding Wall Street’s expectations, beating revenue estimates every single time over the past two years by 7.6% on average.
Looking at Nvidia’s peers in the processors and graphics chips segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Qorvo delivered year-on-year revenue growth of 36.2%, beating analysts’ expectations by 4.1%, and Qualcomm reported revenues up 11.1%, topping estimates by 1.9%. Qorvo’s stock price was unchanged after the results, while Qualcomm was down 9.3%.
Read our full analysis of Qorvo’s results here and Qualcomm’s results here.
Growth stocks have seen elevated volatility as investors debate the Fed’s monetary policy, and while some of the processors and graphics chips stocks have fared somewhat better, they have not been spared, with share prices down 3.5% on average over the last month. Nvidia is up 13.4% during the same time and is heading into earnings with an average analyst price target of $143.1 (compared to the current share price of $126.57).
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