Globally Anticipated! NVIDIA's Earnings Report Is Approaching!

After the U.S. stock market closes on Wednesday, February 26, NVIDIA, the leading enterprise in the field of AI chips, will release its financial results for the fourth quarter of fiscal year 2025 ending at the end of January this year.

 

This earnings report has undoubtedly captured the attention of the entire market.

 

This earnings report is of utmost importance. On a smaller scale, it will determine whether NVIDIA can break away from the consolidating trend it has been in for the past few months and embark on a new upward trend.

 

On a larger scale, this earnings report will influence the entire market's enthusiasm for investing in the AI field, and it may even reverse the current overall sluggishness of the market.

 

Now, let's conduct an in-depth analysis together.

 

First of all, let's take a look at what Wall Street anticipates.

 

In terms of revenue, analysts expect that the fourth-quarter revenue will be $38.1 billion, slightly higher than the company's previously provided guidance of $37.5 billion. Its year-on-year growth is 72.4%, but the sequential growth is only 8.5%, which is the lowest sequential growth rate since NVIDIA's explosive growth.

 

The slowdown in growth is one of the core factors contributing to the consolidation of NVIDIA's stock price during this period. If NVIDIA can prove in this earnings report that its growth has not slowed down, it will undoubtedly be a positive signal for its stock price.

 

Next, regarding the performance guidance. Analysts predict that NVIDIA's revenue in the first quarter will reach $42.07 billion, with a sequential growth of 10.4%. Although this figure is higher than that of the fourth quarter, it still aligns with the overall trend of slowing growth.

 

Factset points out that analysts generally believe that NVIDIA will once again exceed expectations and raise its performance guidance. However, the margin by which it exceeds expectations may be smaller than in previous years, indicating a relatively cautious attitude.

 

 

I believe that the key focus points of this earnings report include: the revenue growth of the AI data center, the delay issue of Blackwell GB200, the product transition of NVIDIA's chips, and the views on the deployment of AI applications.

 

Among them, the market pays particular attention to the revenue growth of the AI data center.

 

NVIDIA's top customers, namely those hyperscale data centers, have all increased their expenditure expectations in the AI field, which indicates that the revenue of NVIDIA's AI data centers will continue to grow.

At the same time, NVIDIA is currently facing the transition of its blockbuster products (from the Hopper series to the Blackwell series) this quarter. Product transition and supply chain issues may have an impact on NVIDIA's performance.

 

In addition, the market also shows significant concern about the delay of Blackwell GB200.

 

According to wccftech, due to the persistent "supply chain issues" of GB200, Frank Lee, an analyst at HSBC, recently adjusted downward the shipment forecast of NVIDIA's NVL rack-mounted servers for fiscal year 2026 from 35,000 units to 30,000 units. He also lowered NVIDIA's target stock price from $185 to $175, while still maintaining a "buy" rating.

 

 

For Jensen Huang, the CEO of NVIDIA, DeepSeek is definitely a crucial topic that cannot be avoided during the earnings conference call.

 

In January this year, the open-source AI model R1 launched by DeepSeek, a Chinese AI start-up company, stunned the world: DeepSeek managed to train a top-notch model that is no less capable than ChatGPT with extremely low training costs.

This piece of news once caused NVIDIA's stock price to plummet by 17% in a single day. Although NVIDIA's stock price has rebounded to a high level over the past month, people's concerns that the improvement in training efficiency may reduce NVIDIA's long-term growth expectations still linger.

 

The earnings report to be released on Thursday will be NVIDIA's first earnings report since DeepSeek shocked the market.

 

Considering that the time period covered by this earnings report happens to be different from the time when DeepSeek shocked the market, it should be impossible to see the impact of DeepSeek on NVIDIA's performance from the earnings report data itself.

 

 

Last weekend, Jensen Huang refuted the market's concerns that DeepSeek would drag down the demand for GPUs for the first time. He emphasized that computing power will still be of vital importance in the future and tried to interpret DeepSeek as a new driving force for boosting chip demand. Presumably, he will emphasize this point again in call.

 

 

Morgan Stanley predicts that if NVIDIA's revenue is higher than expected, its stock price may rise by 3% to 15%. If the earnings report fails to meet expectations, there may be a downward risk of 5% to 10%.

 

In the past, NVIDIA has always been a crucial component stock in the S&P 500 index. Since the advent of ChatGPT, AI-related trading has been dominating the ups and downs of the U.S. stock market, and NVIDIA's strong performance has continuously driven the S&P 500 index to rise.

 

At the current juncture, the breadth of the U.S. stock market is starting to expand. According to the analysis of Jared Blikre, an analyst at Yahoo Finance, since the beginning of this year, NVIDIA's contribution rate to the increase of the S&P 500 index is about 5%, which is much lower than 20% in 2024.

 

Although the market pattern has changed, as the world's second most valuable company, NVIDIA's earnings report will still have a significant impact on the global AI industry, including chip giants such as TSMC, SK Hynix, and ASML.

 

Mark Newton of Fundstrat said, "NVIDIA is still of great significance. We learned from the conference calls of Meta, Amazon, and Alphabet that they all mentioned NVIDIA, indicating that they are making substantial capital expenditures and a large amount of funds are flowing towards NVIDIA. Therefore, the market demand for NVIDIA remains extremely strong."

 

Some analysts have also published articles regarding NVIDIA's future outlook, believing that when the company releases its earnings report, it may burst the artificial intelligence bubble due to poor performance guidance.

 

 

I reminded everyone to pay attention to this earnings report of NVIDIA two weeks ago. At this point in time, investors who are optimistic about NVIDIA may have already bought the stock, while those who are not optimistic are waiting for an opportunity on the sidelines.

 

It's difficult for me to judge exactly how this earnings report will turn out, but my long-term investment perspective on NVIDIA has remained unchanged. In the short term, there may be risks of fluctuations in NVIDIA's stock price, but from a long-term perspective, I still maintain a bullish view.#nvda