NVIDIA is set to release its quarterly earnings report, with widespread market optimism, though analysts suggest the stock reaction may remain muted. The real catalyst could be the upcoming NVIDIA GPU Technology Conference (GTC) in March.
On February 25, after U.S. market close, AI giant NVIDIA will announce its latest financial results. The earnings call is scheduled for 2:00 PM Pacific Time on February 25, which is 6:00 AM Beijing Time on February 26.
BNP Paribas analyst David O'Connor anticipates a "fairly positive" tone from the report but notes that strong numbers may not necessarily drive significant stock gains. He believes NVIDIA might reserve its most market-moving announcements for the March GTC event.
NVIDIA's stock has risen only about 2% this year, significantly trailing the Philadelphia Semiconductor Index's 16% gain over the same period. Key investor concerns this earnings season include competition in the AI chip sector, margin pressure from rising memory chip costs, and capital expenditure trends among hyperscale cloud providers.
**Solid Expectations, But Possibly Priced In** According to FactSet consensus estimates, NVIDIA's adjusted earnings per share for the fourth fiscal quarter are projected at $1.54, with revenue expected to reach $661 billion. Data center revenue is forecast at $607 billion. Full-year revenue is anticipated to be $2.138 trillion, with first-quarter revenue guidance projected at $729 billion.
The challenge is that strong quarterly results in recent periods have repeatedly failed to lift the stock. Market expectations for NVIDIA are already high, leaving limited room for positive surprises. O'Connor suggests investor attention has already shifted toward the March GTC conference.
This earnings report is also viewed as a health check for AI infrastructure investment.
Zacks Investment Research equity strategist Andrew Rocco stated that NVIDIA's performance will provide insight into AI spending trends and also reveal operational conditions of emerging cloud computing partners like CoreWeave and Nebius Group.
**Margins and Competition Are Key Concerns** O'Connor highlighted that with memory chip prices continuing to rise, whether NVIDIA can maintain its gross margins amid increasing cost pressures will be a focal point during the earnings call.
Another issue is competition. Growing attention toward custom chip projects, such as the tensor processing unit (TPU) jointly developed by Google and Broadcom, has led markets to question whether NVIDIA can sustain its long-term dominance.
HSBC analyst Frank Lee expects NVIDIA GPU demand to remain robust. Combined AI infrastructure spending plans from Alphabet, Amazon, Meta, and Microsoft total $6.5 trillion this year, illustrating the scale of demand.
Lee believes NVIDIA GPUs will remain the primary choice for AI computing investment for the foreseeable future. However, how long that "foreseeable future" lasts is a question no one can answer with certainty.
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