Jump to content

Nvidia Q3 earnings preview: can sky-high expectations be met?



Nvidia is set to report Q3, FY24 results on Nov 21st, 2023 after market closes. Nvidia’s share price has surged 20% in November and 260% year to date. Now, what to expect for the upcoming earnings?

original-size.webpSource: Bloomberg


Hebe Chen | Market Analyst, Melbourne | Publication date: Friday 17 November 2023 09:35

Nvidia Q3 Earnings date

Nvidia is set to report third-quarter FY244 results on Nov 21st, 2023 after market closes.

Nvidia Q3 Earnings expectation

For the September quarter, the AI chip leader expects revenues of $16.09 billion, representing a jaw-dropping 171.7% increase from the same period last year, and 18% up from the second quarter. Its earnings per share is estimated to grow by 400% year-on-year to $3.39 per share.

original-size.webpSource: Nasdaq

Nvidia Q3 Earnings key watch

Hot chips

As a market leader in the AI chip world, Nvidia enjoys significant pricing power and benefits from explosive surging demand so far this year. Not only have major US tech giants purchase Nvidia’s chips, but Chinese tech companies like Tencent have stocked up Nvidia’s made-for-China chips, despite the elevated chip export restrictions imposed by the Biden administration.

Therefore, it’s reasonable to expect Nvidia’s chip sales in the third quarter to sustain their robust momentum from the previous quarters, with the anticipation that revenue from the “Data Center” division will reach $12.7 billion—a staggering 232% year-on-year increase from $10.32 billion in Q2.

However, emerging signs indicate that a shifting landscape in the AI chip world is on the way.

There’s no doubt that the US government’s chip restrictions have cast a shadow over Nvidia’s Chinese market which contributes nearly one-quarter of the chip market’s total revenue. Despite Nvidia's plans to release three new chips for China in the face of the new bans, Chinese companies are beginning to lose faith and seek out non-US suppliers. Baidu, for example, recently announced a new deal to source chip from Huawei. As a result, Nvidia's outlook for the quarter and the year ahead, in the face of this new reality, will be in focus during its Q3 earnings.

The return of Gaming

Moreover, NVIDIA’s “Gaming” and “Professional Visualization” sectors are expected to further recover in the third quarter. In the previous quarter, revenue from the Gaming sector and Professional Visualization jumped up 22% and 24% year-over-year, respectively. It is anticipated that strong demand across most regions for gaming products will result in third-quarter revenue from the Gaming sector standing at $2.78 billion, a 76.5% increase compared to the same quarter in 2022.

Nvidia rating and technical analysis

Based on ratings from 38 Wall Street analysts, 37 suggested the stock as a buy, while one rated it as a hold. For the next 12 months' price target, the average price range for Nvidia is $560-$648, representing a 14%-32% premium from today’s stock price.

original-size.webpSource: Tipranks/IG

From a technical standpoint, after breaking out from the August-October downward trendline, Nvidia's prices have surged more than 20% in November and 260% year to date, with the record high marked in August now back in sight.

While the newly-formed ascending trendline should support maintaining its upward trajectory, the approaching psychological $500 level is poised to play a crucial role with a great potential to prompt profit-taking, similar to what happened at the end of August. Thus, a move above this level will help the price to revisit its record high at $520, but failing to do so may leave the ascending tunnel at risk of breaching, leading to a move back towards the $470 level.


Nvidia Q3 summary

In summary, in a year defined by the AI gold rush, it’s easy to understand that expectations are sky-high for the leader in the AI chip world. Additionally, Nvidia's Q3 earnings come at a time when its stock prices have been rising sharply, with another record high seemingly on the horizon. Now the question is whether Nvidia’s upcoming report can meet such high expectations and lofty valuation.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.


Recommended Comments

There are no comments to display.

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Create New...