Nvidia earnings will be major test for AI demand, market rally By Reuters

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Nvidia earnings will be major test for AI demand, market rally

© Reuters. FILE PHOTO: A view of a Nvidia logo at their headquarters in Taipei, Taiwan May 31, 2023. REUTERS/Ann Wang/File Photo) investors expect the chip designer to forecast quarterly revenue above estimates when it reports results on Wednesday. Their only question is, by how much?

The blistering rally in its shares means that Nvidia has little room for any earnings-related disappointment and anything other than a higher-than-expected forecast could trigger a rout in its stock, some analysts have warned.'s gains this year have come from the AI-driven rally in Nvidia and Big Tech stocks.

Wall Street expects the chip company to guide for a rise of about 110% in third-quarter revenue to $12.50 billion, according to Refinitiv. Nvidia has only forecast revenue below estimates once in the past two years. While the company's 12-month forward price-to-earnings ratio soared dramatically to more than 80 after its second-quarter revenue forecast of over 50% growth in May, it has come down since then as analysts raise their earnings expectations.

 

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