Another key market event is coming: Nvidia’s results. The publication of the accounts of this company has become one of the events highlighted each quarter, capable of changing the markets almost on the same level as the American elections themselves or the decisions of central banks. The company is not only interested in its current numbers, but also its ability to capitalize on the future of artificial intelligence.
Why are Nvidia’s results important? The company currently weighs more than 7% and 9% of the S&P 500 and Nasdaq 100, respectively. The companies that have driven the market the most over the past two years are those related to chip or semiconductor manufacturers. In fact, the growth of each of them, and in particular of Nvidia, has been such that the company today exceeds $3.5 trillion in capitalization, being the most valuable company in the world ahead of Apple and Microsoft.
Nvidia is undoubtedly the standard bearer of the market and almost the best indicator of stocks around the world. “In the short term, the last results known in August led to falls in its share price of 6%, but this has not been usual. Over the last 13 earnings releases, the company has grown as much as 7x versus 4x losses the day after it became known.. “2 of those 4 times happened last year,” says Juan José del Valle, analyst at Activotrade SV.
The figures expected by the market
The consensus expects Nvidia to present some net profit of $17.495 million. If this figure were reached, the semiconductor company would achieve the highest quarterly profit in its history and, in addition, This would mean improving the data for the same period of the previous year by up to 89%. ($9.243 million). In fact, since the last quarter of 2023 (when ChatGPT emerged and AI fever broke out), Nvidia’s data has continued to beat market estimates.
“We expect Nvidia to continue to perform well across all segments and for strong demand for PC gaming to be an important revenue driver for the company, offsetting OEMs, which are in secular decline. We expect the data center segment to see strong growth as hyperscale customers continue to adopt GPU-accelerated learning. [unidades de procesamiento gráfico] to process large data sets. We are also encouraged by the strength of the automotive and commercial segments, although mass adoption of autonomous driving in the market remains to be seen. We expect a significant increase in equities, which leads to our overweighting,” we argue at JP Morgan while waiting to know the official accounts.
For the full year 2024, they expect net profit to amount to $68,616 million (144% higher than the already historic 2023 figure). And, in just two exercises, Analysts predict that the company will increase its profit above $100 billion.thus becoming one of the five companies in the world that would benefit from these advantages in 2026.
The fine print to inspire action
It is almost a given that Nvidia’s figures will be good, even if the market is increasingly demanding of the company. Investors are awaiting numbers and performance from its Blackwell superchip, which is expected to dominate future AI development.
In previous results, the company acknowledged some overheating issues with the new model. The Blackwell chip is Jensen Huang’s big bet and the mystery he wants to clear up in the markets. The only hint the CEO offers is that it will record “several billion dollars in revenue.” Huang noted that demand for the Blackwell chip has increased, noting that suppliers of the chip, whose physical production is outsourced, are meeting the pace set by the company.
Analysts at Morgan Stanley were optimistic about Blackwell’s potential impact on Nvidia’s revenue, saying it will be felt as early as 2025. The company explains: “Based on our supply chain controls of GPU testing, Blackwell chip production is expected to be around 250,000 to 300,000 in the fourth quarter. quarter, which would be between $5 billion and $10 billion in revenue.”
