NVIDIA is scheduled to release its next earnings report on Thursday after closing bell, and consensus estimates suggest $2.1 billion in revenue and earnings of 83 cents per share. The chip maker guided for sales of $2.1 billion, plus or minus 2%. NVIDIA smashed earnings estimates in its last report.
NVIDIA expected to beat the Street and guidance
Deutsche Bank analyst Ross Seymore expects NVIDIA come out ahead of not only consensus but its own guidance, as he’s looking for $2.14 billion in sales. He said in his preview report that PC data points during the fourth fiscal quarter were better than expected, which resulted in Intel and Advanced Micro Devices beating their respective consensus numbers.
Additionally, he noted that NVIDIA consistently beats estimates and has posted revenues higher than the midpoint of its guidance for the last six quarters for an average beat of 11%. He’s looking for Gaming to grow 10% sequentially and Data Centers to rise 5%. He’s looking for a 2% sequential increase in Provisualization, a 3% growth rate in Automotive and a 5% decline in OEM/ Other.
For the current quarter, Seymore is projecting $2 billion in revenue, which is higher than the consensus of $1.88 billion. Although there will likely be a seasonal decline in Gaming for this quarter, he sees console-related builds for Nintendo partially offsetting this.
Despite his expectation for continued strength in NVIDIA’s results, he continues to rate the chip maker at Hold because any additional share price increase must come from earnings per share growth instead of valuation expansion.
Another beat and raise quarter predicted
Goldman Sachs analyst Toshiya Hari continues to rate NVIDIA as a Buy with a $129 price target going into tonight’s print. He noted healthy intra-quarter data points and demand trends in all three core segments. The chip maker remains his top pick in Semis and on his Conviction List and believes Street estimates will be revised upward after Thursday’s earning report.
Further, he expects NVIDIA stock to rise on the back of the release.
Other questions going into the print
RBC Capital Markets analyst Mitch Steves remains positive on NVIDIA with an Outperform rating and $124 price target going into Thursday’s report. He’s also looking for another beat and raise quarter and particularly sees estimates for the Data Center segment as “mis-modeled for 40% growth versus potential for 100%+ growth for the full year.” He also believes the chip maker’s guidance will beat the consensus and predicts that NVIDIA shares will rise following the earnings report, based on the reaction to AMD’s earnings results and guidance.
Despite AMD’s strength, he doesn’t expect the company to start stealing share from NVIDIA this year. He does expect the Gaming segment to grow meaningfully this year and looks for autonomous driving to grow as well, based on the announcement about Audi. He predicts that the next two or three years will bring “notable” increases in autonomous driving revenue.