Nvidia is set to report earnings for the fourth quarter of the 2024 fiscal year after the market closes on Wednesday, Feb. 21. Nvidia has been on a tear since last report; shares have risen about 40% since mid-November 2023. Will Nvidia stock deliver another stellar earnings report?
Previous Quarter Review
Nvidia reported fiscal third-quarter results that surpassed Wall Street’s predictions. But the company called for a negative impact in the next quarter because of export restrictions affecting sales to organizations in China and other countries.
Here’s how the company did, compared to the consensus among analysts surveyed by LSEG, formerly known as Refinitiv:
Earnings: $4.02 per share, adjusted, vs. $3.37 per share expected
Revenue: $18.12 billion, vs. $16.18 billion expected
The company’s data center revenue totaled $14.51 billion, up 279% and more than the StreetAccount consensus of $12.97 billion. Half of the data center revenue came from cloud infrastructure providers such as Amazon, and the other from consumer internet entities and large companies, Nvidia said.
With respect to guidance, Nvidia called for $20 billion in revenue for the fiscal fourth quarter. That implies nearly 231% revenue growth.
Q4 Results Outlook
Analysts expect Nvidia's revenue to be $20.43 billion, adjusted net income to be $11.374 billion, and adjusted EPS to be $4.597, according to Bloomberg's unanimous expectations.
For this quarter, several factors disclosed by the company could be crucial to the success or failure of bullish theses moving forward.
Some investors have raised concerns about how US limitations on chip exports could impact NVDA’s top and bottom lines. Thus, understanding how the company is navigating and will continue to navigate the issue and analyzing the geographical composition of the chipmaker’s revenue will be important steps for investors moving forward.
Another factor with the potential to affect NVDA’s bull thesis is the success of the company’s Data Center segment. Updates to Nvidia’s Total Addressable Market (TAM), new partnerships, upcoming chip developments, and the status of H200 are all pertinent to that segment.
Lastly, a critical short-term factor for NVDA will be the company’s guidance for 1Q25 (FY). If Nvidia demonstrates even greater optimism than the consensus, it could provide the steam needed for a continued bull run
Conversely, if the company envisions a more challenged scenario (not in line with the consensus) due to regulations, increased competition, weaker demand in certain sectors, or other factors, traders and investors may react unfavorably.
Analyst's opinions
Goldman hikes Nvidia price target
Goldman Sachs Analyst Toshiya Hari raised his 12-month price target on Nvidia stock to 800 from 625. He also reiterated his buy rating and kept Nvidia on the firm's "conviction list" of top stock picks.
Goldman analysts also raised their fiscal 2025 and 2026 estimates for Nvidia's non-GAAP earnings per share by 22% on average to reflect "recent industry data points indicative of robust AI server demand and improving GPU supply."
Bank of America hikes Nvidia price target
BofA analyst Vivek Arya raised his price target on Nvidia to $800 from $700 per share, while reiterating his buy rating on the stock and calling for a strong fourth quarter report later this month.
“Early days, but results from top US cloud customers suggest solid motivation for spending in genAI,” the analyst wrote. “Enterprise genAI adoption has yet to kick off and become more material in CY25, with NVDA benefitting from its widespread availability on public clouds, and unique partnerships with ServiceNow, SAP, VMWare, Dell, HPE and others.”
Loop Capital Sets Street-High Price Target on Nvidia
Loop Capital initiated the chipmaker with a buy rating and a $1,200 price target. The forecast, which is a Street high, implies shares gaining 65% from Thursday’s Friday. Over the last 12 months, the stock has soared more than 200% amid the excitement around AI.
“We’re gonna party like it’s 1995!” the firm wrote in a Thursday note, referring to the dot-com bubble of the 1990s.
“We believe not only is there material upside to Street estimates in CY2024/FY2025 & CY2025/FY2026, but that we are at the front end of a 3–5 year GPU compute & Gen AI foundational build across Hyperscale,” analyst Ananda Baruah said in the note. “Our work suggests NVDA’s largest customers will be taking everything NVDA can give them in 2024 and 2025.”