Eight things to look for in the Nvidia earnings report

It’s a rare moment in global financial markets when everything hangs on a single earnings report. It’s been similar for the past few quarters for Nvidia but this one lands at a particularly quiet moment for broader markets and has taken on extra significance.

Here are some of the numbers to look for today but I would warn that on virtually every metric, the market expects NVDA to beat the ‘consensus’ and guidance. That’s just the way the game is played with a high-flying stock like Nvidia.

1) Nine percent

That’s the up-or-down implied move in Nvidia shares in the options market. That implies a $300 billion move in either direction, which is the market cap of McDonald’s or Pepsico. It’s a reminder of just how big Nvidia has grown.

2) 0.64

That’s the consensus on earnings per share. At an annualized rate, that puts the P/E at 49x, which isn’t a crazy valuation for a company that’s so hot.

3) $28.48 billion (guidance was $28 billion plus-or-minus 2%)

That’s the consensus revenue forecast. This is where it gets a bit tougher to justify the valuation. The company is operating at incredible margins but that’s a run rate of $114 billion per year. That has the company trading at 26x sales at a time when we don’t know how much competition is coming and how sustainable the investment from megacap tech will be. 75% margins are hard to sustain, especially when you’re not the one manufacturing the chips.

4) Full guidance

Here is what NVDA said in terms of guidance in the prior quarterly report:

Outlook
NVIDIA’s outlook for the second quarter of fiscal 2025 is as follows:

• Revenue is expected to be $28.0 billion, plus or minus 2%.
• GAAP and non-GAAP gross margins are expected to be 74.8% and 75.5%,
  respectively, plus or minus 50 basis points. For the full year, gross
  margins are expected to be in the mid-70% range.
• GAAP and non-GAAP operating expenses are expected to be
  approximately $4.0 billion and $2.8 billion, respectively. Full-year
  operating expenses are expected to grow in the low-40% range.
• GAAP and non-GAAP other income and expense are expected to be an
  income of approximately $300 million, excluding gains and losses from
  non-affiliated investments.
• GAAP and non-GAAP tax rates are expected to be 17%, plus or minus 1%, excluding any discrete items.

4) $31.69 billion

That’s the consensus for revenue in the subsequent quarterly report. I’d emphasize that matching this isn’t likely to be enough, it will need to be beaten substantially to generate further momentum in NVDA shares. The gross margin next quarter is expected at 75.5%.

5) $126

That’s the share price going into the report. That’s a nice bounce from the $90 level in early August. At the time, there was fear that megacap tech companies would indicate slower spending on chips but that never came to pass and shares have since rebounded, but not to the $140.76 high. Notably, it would take an 11% rally tomorrow to break the high.

6) $121.10 billion

That’s the current consensus for FY2025 and while we aren’t likely to get any guidance in that direction, the market will be scouring the report and comments from management on how likely that number is to be met or beat.

7) 76.4%

That’s the gross margin consensus for next year, which is somehow even higher than this year as Nvidia transitions to Blackwell chips. It’s possible they could beat that because they’re currently so far ahead of the competition and have incredible pricing power.

8) Timing

There are question about the delay of Blackwell deliveries and that could be a huge market movers. A slow rollout would substantially hurt the January and April quarters as customers wait for the new chip.

This article was written by Adam Button at www.forexlive.com.