After the market closes on Tuesday in the Eastern United States (early Wednesday morning Beijing time), semiconductor giant Nvidia will announce its third fiscal quarter (three months to the end of October) quarterly results. As one of the biggest beneficiaries of this year's artificial intelligence (AI) wave, the market has high expectations and confidence in its performance. Because of this, the company's stock price also hit an all-time high on Monday.

So far this year, NVIDIA's stock price has soared by more than 250%, with its market value reaching US$1.25 trillion. It is a well-deserved "star stock" this year. As far as the global semiconductor industry is concerned, Nvidia's market value is higher than the combined market value of the five semiconductor companies AMD, Intel, Qualcomm, Broadcom, and ASML, and it is the well-deserved king in this field.

Analysts expect the stock to be the biggest driver of overall profit growth for the S&P 500 in the third quarter.


Currently, Wall Street generally expects Nvidia to achieve its third consecutive blowout quarterly performance growth. Specifically, the company's revenue in the third quarter is expected to reach US$16.092 billion, a year-on-year increase of 171%; earnings per share will be US$3.36, compared with US$0.58 in the third quarter of last year.

It is worth noting that the market expects data center revenue to reach US$12.82 billion in the third quarter, a record high, a year-on-year increase of 233.57%, and will continue to promote the company's total revenue growth. In addition, net interest rate is expected to increase from 24.55% last year to 51.64%; operating cash flow is also expected to reach US$7.42 billion, reaching a new high.

In the upcoming financial report, the sales of artificial intelligence chips will undoubtedly receive the closest attention. According to estimates by Jon Peddie Research, Nvidia's GPU shipments will account for 87% of the entire market this quarter, followed by AMD and Intel, with market shares of 10% and 3% respectively.

Wall Street is mostly bullish

"We expect Nvidia to report better-than-expected numbers and raise guidance when it reports on November 21," Bank of America research analyst Vivek Arya wrote in a note.

Bank of America remains bullish on the stock, calling its valuation "compelling" and noting that seasonal trends remain favorable.

Analysts at Susquehanna Financial Group said in a research note, "In short, we expect Nvidia to have another strong quarter, but we think investors have already expected this." He was referring to the bar for Nvidia to perform better than expected will be very high.

FactSet senior analyst John Butters said in a report: "Nvidia is expected to be the largest contributor to third-quarter earnings growth for the entire S&P 500 index."

He noted that excluding the company would have widened the S&P 500's third-quarter composite earnings decline from 0.4% to 1.8%.

Julian Emanuel, senior managing director of Evercore ISI, noted on Sunday that "it's still Nvidia's world now," but he warned investors that no matter which direction the stock market fluctuates, they must be prepared for "the volatility of the post-Nvidia era."

Data shows that among 52 analysts covering Nvidia, 49 rate the stock a buy, while the other three rate it a hold. The average price target given by analysts is $655.60, which is approximately 33% higher than Nvidia’s current stock price.

Looking towards 2025?

Wall Street may already be looking further into the future. Analysts said that investors hope that Nvidia's high growth rate can continue for many years, so they hope to see more definite signs to prove this. Wall Street currently expects Nvidia's quarterly revenue to reach $22 billion by the fall of 2025.

Citi analysts noted that the market will focus on the impact of geopolitics on Nvidia's data center sales outlook for fiscal 2025 and 2026, early data on the sustainability of data center sales and general AI applications/products, as well as Nvidia's new AI hardware roadmap.

However, there are also endless voices of concern.

UBS analyst Timothy Arcuri said that "the key point of contention for Nvidia stock" is the direction of 2025, as investors appear to be worried that customers will consume their large purchase intentions by then, thereby reducing their interest in purchasing new products. Although it is "unlikely" that there will be too much substantive discussion about 2025 during this earnings release period.

Goldman Sachs analyst Toshiya Hari pointed out that Wall Street seems to be worried that Nvidia's data center revenue may decline in 2025 because longer delivery times are now pushing customer orders to exceed actual demand.

He wrote that currently, it is extremely challenging to judge the performance of Nvidia's data center business in 2025, and the earnings call is unlikely to resolve the debate between bulls and bears.

Jerry Chen, a senior analyst at Jiaqiang Group, said that due to high market expectations, if the performance is not as strong as expected, it may increase the risk of a short-term correction in the stock price. However, the impact of a single quarter's financial report is difficult to shake the company's mid- to long-term optimistic prospects.