What To Expect From Nvidia's (NVDA) Q1 Earnings

Leading designer of graphics chips Nvidia (NASDAQ:NVDA) will be announcing earnings results tomorrow after the bell. Here's what you need to know.

Nvidia beat analysts' revenue expectations by 7.6% last quarter, reporting revenues of $22.1 billion, up 265% year on year. It was a stunning quarter for the company, with meaningful revenue beat, strong gross margin improvement, and EPS outperformance vs. Wall Street's estimates. Guidance for the next quarter was also good, with revenue, gross margin, and implied operating profit coming in ahead of expectations.

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 242% year on year to $24.59 billion, a reversal from the 13.2% decrease it recorded in the same quarter last year. Adjusted earnings are expected to come in at $5.58 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 7.1% on average.

Looking at Nvidia's peers in the processors and graphics chips segment, some have already reported their Q1 results, giving us a hint as to what we can expect. Qorvo delivered year-on-year revenue growth of 48.7%, beating analysts' expectations by 1.6%, and Qualcomm reported revenues up 1.3%, in line with consensus estimates. Qorvo traded down 14.4% following the results while Qualcomm was up 9.8%.

Read our full analysis of Qorvo's results here and Qualcomm's results here.

There has been positive sentiment among investors in the processors and graphics chips segment, with share prices up 17.1% on average over the last month. Nvidia is up 19.5% during the same time and is heading into earnings with an average analyst price target of $1,039 (compared to the current share price of $950.1).

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