Earnings are now a test of AI spending
BlockBeats said on August 24 that Nvidia will report quarterly results after the U.S. market closes on Wednesday. On Wall Street, the release is being treated as a key checkpoint for whether the AI investment rush is still extending.
Analysts say investors should look beyond revenue and profit. They are also watching CEO Jensen Huang’s comments for clues on whether large-scale spending on AI infrastructure can keep growing at the same pace.
Expectations keep rising
The bar for the report has been lifted repeatedly. Nvidia has beaten analyst earnings expectations in each of its past 14 quarters. In the latest quarter, net income rose 210% from a year earlier, well above Wall Street’s prior estimate of 126%.
Analysts expect second-quarter revenue to hit a record $92 billion, up from a forecast of $78 billion at the start of the year. The company would need to generate more than $51.5 billion in profit to clear current market expectations.
Post-earnings trading has its own pattern
Nvidia’s stock has also shown a recurring reaction after earnings. In the last four quarterly reports, shares fell in the next trading session.
The options market is pricing in a 5.3% move on the trading day after the report, above the average seen over the past 12 months. Some investors are betting on a pullback, while others remain constructive.
Frank Lee, head of technology hardware and semiconductor research at HSBC Global Research, recently raised his price target on Nvidia to $360 from $325. He pointed to the company’s strategic ties with suppliers and its importance in open-source artificial intelligence.