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Nvidia's Q4 earnings preview: A defining moment for the AI trade

EditorOliver Gray
Published 21/02/2024, 11:49 am
Updated 21/02/2024, 11:49 am
© Reuters. - NVIDIA Corporation (NASDAQ:NVDA), a key player in the artificial intelligence (AI) sector, is gearing up to announce its fourth-quarter earnings results on Wednesday, February 21. As a major component of the Magnificent Seven tech stocks, Nvidia's performance is highly anticipated by Wall Street analysts who predict a significant year-over-year jump in the company's revenue.

Analysts expect Nvidia to report revenue of $20.4 billion, a stark increase from the $6.1 billion reported in the same quarter last year. This projected Q4 revenue is close to the total annual revenue of $27 billion that Nvidia reported in 2022, underscoring the immense impact of AI sales on the company's growth.
Nvidia earnings incoming!

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Investors will be closely monitoring Nvidia's guidance, which has consistently outperformed analysts' expectations in recent quarters. If this trend continues, Nvidia's stock could see a significant surge. However, more muted guidance might temper this growth. Several analysts have recently increased their price targets for Nvidia shares, signaling strong expectations for the company's performance.

Another key aspect to watch out for in the earnings report is Nvidia's comments on China. Restrictions on certain technologies, including some of Nvidia's most important chips, have been imposed by the U.S. Although Nvidia is working on workarounds and has stated that these restrictions will not impact their current revenue, the company could lose out on significant potential revenue in the future if it is unable to secure a strong foothold in the Chinese market.

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Not to be overlooked, Nvidia, once primarily a gaming-focused company, is expected to report an increase in its gaming revenue. This is predicted to come in at about $2.7 billion for the quarter, up from $1.8 billion last year.

Nvidia's Q4 earnings report could potentially be a defining moment for the AI trade. With the company's stock quintupling since the start of 2023, investors are keen to see if Nvidia can sustain its exceptional performance. As such, this report will be a critical factor in shaping the AI market's trajectory moving forward.

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