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Nvidia Q1CY25 Preview: The US-based chip giant Nvidia will announce the results for the January - March 2024 quarter on May 22, 2024.
Analysts are eyeing impressive figures, with the street anticipating earnings of $13.2 billion, translating to $5.62 per share, alongside projected revenue of $24.6 billion in the quarter. Moreover, there's a buzz around the possibility of a $30 billion quarter by the year's end.
Justin Khoo, Senior Market Analyst APAC - VT Markets said, “Nvidia's financial results (in the last quarter) have been stellar, with significant revenue growth driven by high demand for its AI chips. This robust financial health positions the company well for continued investment in innovation and market expansion.”
Another factor that may influence Nvidia's earnings include its recent collaboration with AWS, aimed at expediting the development and deployment of generative AI applications. This venture leverages Nvidia's high-performance GPUs and AWS's cloud infrastructure to deliver scalable and efficient AI solutions, particularly beneficial in sectors like healthcare, automotive, and industrial domains.
“Nvidia, a clear leader in AI hardware, continued to strengthen its position at the GTC 2024 event. CEO Jensen Huang highlighted groundbreaking advancements, including the Blackwell AI super chip, designed to provide unprecedented computational power and efficiency. This chip supports various AI applications, from generative AI to autonomous driving, and is expected to revolutionise industries by enhancing productivity, efficiency, and safety,” Khoo noted.
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Nvidia stock performance
Earlier this year in February, chip maker Nvidia's market capitalisation zoomed $277 billion in a single day as Nvidia stock climbed nearly 16 per cent a day after the result announcement. Notably, the stock has climbed 98.03 per cent year-to-date (YTD) while it has surged nearly 206 per cent in 2023.
Nvidia stock strategy
Nvidia's dependence on sectors like gaming and cryptocurrency, which are subject to significant market volatility, poses a risk, analysts said.
“If Nvidia maintains its ability to innovate and sustain strategic partnerships, it can navigate these opportunities and challenges, ensuring continued leadership in the rapidly evolving tech landscape,” said Khoo.
Although Nvidia's stock is currently perceived as expensive, trading at $948, analysts suggest that prices below $720 present favourable accumulation opportunities. Technical analysis indicates potential support at $690, underscoring the strategic entry points for investors.
Nvidia financial performance
In the October - December 2023 quarter, Nvidia reported a revenue of $22.1 billion, a 22 per cent increase from the previous quarter (Q3CY24) and a whopping surge of 265 per cent from the same period a year ago (Q4CY23).
During this quarter, GAAP earnings per diluted share stood at $4.93, reflecting a considerable uptick of 33 per cent from the previous quarter and a notable surge of 765 per cent from a year ago.
Additionally, non-GAAP earnings per diluted share stood at $5.16, indicating a 28 per cent rise from the previous quarter and a substantial increase of 486 per cent from the same quarter a year ago.
Looking at the fiscal year 2024 as a whole, Nvidia's revenue zoomed 126 per cent to $60.9 billion. GAAP earnings per diluted share for the fiscal year amounted to $11.93, demonstrating an impressive surge of 586 per cent from the previous year. Similarly, non-GAAP earnings per diluted share stood at $12.96, an increase of 288 per cent compared to the previous fiscal year.
Challenges for Nvidia
Nvidia, analysts believe, is encountering mounting competition from industry heavyweights including Intel, AMD, and specialised AI chip developers like Google and Amazon. “These competitors are developing their own AI hardware solutions, which could erode Nvidia's market share over time,” Khoo said.
