Bubble or Rocket? Nvidia’s Q2 earnings could set tone for AI industry
Nvidia is finally set to reveal its second quarter earnings after the market closes on Wednesday, Aug. 28. A flurry of analyst activity and investor predictions has led to this being referred to as the most important event for Wall Street and the US economy of the year.
Nvidia’s rise in value over the past few years has most commonly been described by pundits as meteoric. Over the past decade its stock has risen about 2,872%. And in the past 12 months it’s risen more than 165%.
The company’s past two quarters have demonstrated record breaking revenue amid an all-time high market capitalization of $3.162 trillion. It even briefly became the world’s most valuable company by market capitalization ahead of Apple and Microsoft in June.
Wall Street Expectations
Nvidia posted record quarterly revenue of $26 billion in Q1, up 18% from Q4, and up 262% from the prior year. According to the company at the time, on May 22, 2024, it expected second quarter revenue to reach $28 billion.
Wall Street analysts are hoping that number will reach closer to $29, according to a report from CNBC. Meanwhile, financial analysts and pundits have called this the “Super Bowl” of earnings reports and said it rivals the US jobs report for economic impact.
The AI sector’s fate
Part of the fervor driving investor and analyst speculation surrounds Nvidia’s position in the AI market. The company’s graphical processing units (GPUs) have become the industry standard hardware for training large language models such as those that power OpenAI’s ChatGTP and Anthropic’s Claude.
Due to their high demand and the AI boom, Nvidia’s chips have become such a hot commodity that it’s widely believed that this earnings call could make or break the AI industry’s fortunes over the next several quarters.
Related: Analysts come unglued ahead of Nvidia earnings call — $10T within 5 years
Aside from the number themselves, analysts will likely pay careful attention to the company’s third quarter earnings projections — the general tenor of coverage appears to indicate most are predicting further record-breaking growth.
Also in play will be Nvidia’s announcements concerning its upcoming “Blackwell” next-generation AI chips. One of the upcoming hardware models has reportedly been delayed and CEO Jensen Huang is expected to address the reports and whether any actual delays may affect revenues going forward.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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