Nvidia Corporation co-founder and CEO Jensen Huang at the Nvidia GPU Technology Conference (GTC) in San Jose, California, USA, on Tuesday, March 19, 2024.
David Paul Morris | David Paul Morris Bloomberg | Getty Images
Nvidia First-quarter earnings will be released after the market close on Wednesday.
Wall Street expected the following, according to London Stock Exchange Group consensus estimates:
- Earnings per share: $5.59, adjusted
- income: US$24.65 billion
The chipmaker was a niche developer of 3D gaming hardware a decade ago and is now at the center of technology activity.
Nvidia’s report comes about a year after the company first signaled to investors that it was embarking on a period of rapid growth, driven by demand for artificial intelligence chips from the likes of Google, Microsoft, Meta, Amazon and OpenAI.
Revenue growth has exceeded 200% in each of the past two quarters, and Wall Street expects this trend to continue, with annual growth expected at 243% in the first quarter. Net profit is expected to grow more than fivefold from a year ago.
The stock has more than tripled since the company reported first-quarter earnings last year and provided surprisingly strong guidance for the second quarter.
The company’s latest generation of AI graphics processing units (GPUs) is called Hopper, which top AI scientists need to develop chatbots, translators and image generators. Customers have been buying them up in droves over the past year, with top cloud and networking companies spending billions on the technology to build out their infrastructure.
But as many customers have to start reaping the benefits of their huge payouts, questions have arisen about the sustainability of Nvidia’s rapid growth. Artificial intelligence software is much more expensive to operate than traditional software, partly due to the expense of Nvidia GPUs.
Nvidia has also begun launching its next-generation AI GPU called Blackwell. Sales of existing technology could stall as some companies focus on upcoming chips.
Starting in the second fiscal quarter, Nvidia will face difficult year-over-year comparisons with the early stages of artificial intelligence-driven growth. Analysts expect expansion to fall below 100% in the July quarter and decelerate sharply over the next two periods.
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