Nvidia Q1 Preview: Gaming, Data Center Businesses Are Ready for a Strong Quarter
Nvidia (NASDAQ:NVDA) is expected to release first-quarter earnings results on Wednesday, May 25, after the market close.
Semiconductor company posted Q4 earnings and gave Q1 guidance that easily beat expectations, even though gross margin guidance was flat.
In Q1, Nvidia gave revenue guidance of $8.1 billion, with GAAP and non-GAAP gross margins of 65.2% and 67% respectively. It projected GAAP operating costs for the period to be $3.55 billion, including $1.36 billion for Arm-related write-offs.
Consensus EPS estimate is $1.29 (-64.8% Y/Y) and Consensus Revenue Estimate of $8.09 billion (+42.9% Y/Y).
Bank of America analyst Vivek Arya thinks Nvidia and other chipmakers could benefit from Good results for cloud businesseswith both Microsoft (MSFT) and Alphabet (GOOG) continued to see strength in their most recent quarters.
Morgan Stanley also expects a Strong quarter for Nvidia from its gaming and data center businesses. It considers stocks a “core holding, but with the short-term overheating of the gaming environment and the end of the crypto cycle, we see some difficulty in the game.”
Nvidia’s data center business in particular should perform well according to MS, which highlights Mellanox showing signs of unmet demand and no business slowdown over the forecast period.
Share saw some recent weakness as the sell-off in the broader semiconductor market worsened. Nvidia dropped more –45% YTD. Here’s a look at it performance return price Compared to peers:
The price hit an all-time high of $346.47 last November, as high demand and global chip shortages spurred interest in the stock. From there, worries about a lagging economy and the prospect of higher interest rates stock considerationssending them hovering near a 52-week low.
Despite the decline, Nvidia remains in the top position to capitalize on demand in the semiconductor market. Industry insiders expect this trend to continue for at least a few more years. Intel CEO Pat Gelsinger suggests shortages will extended until 2024.
SA contributors have been cautious about Nvidia lately, with Envision Research noting “major uncertainties” such as the worsening chip shortage and crypto mining turmoil.
In the past 2 years, NVDA surpassed the EPS . estimate 100% of the time and completed the revenue estimate 100% of the time.
In the past 3 months, EPS is estimated at 3 revised version and above and 1 down. Revenue estimates have 3 times of upward adjustment and 1 decrease.