Nvidia’s earnings have become the most important event on the US corporate calendar. Its central role in the public market AI trade has meant it’s now the most important barometer of the driving force behind bumper returns for the S&P 500 over the past two years.
Tonight, investors will learn how the chip maker performed during the last quarter with massive potential implications for the stock and the wider market.
Expectations are again high when compared to a year ago, but the pace of growth is slowing. Analysts have pencilled in Nvidia to record $38.5bn in the fourth quarter and EPS of $0.84
Perhaps the most important element of Nvidia’s earnings will be their forecasts. The analyst consensus for first-quarter revenue guidance is $42.5bn.
Major tech companies, including Meta, Amazon, and Microsoft, have all signalled that they will hike AI spending in the coming periods. Investors will want to see what visibility Nvidia has over capturing some of this spending.
Investors will watch keenly for any commentary around the takeup of new products, including the Blackwell superchips.
Nvidia’s earnings will be dropped against the backdrop of a new threat from China and Deepseek that could dampen demand for Nvidia’s chips, should they be able to produce the same results for users by using less energy and resources.
“Given the emergence of Deepseek in recent weeks, and the potential that AI models can be built using older, fewer, and cheaper NVDA chips than had previously been thought, risks around the AI theme more broadly have become increasingly two-sided,” said Michael Brown Senior Research Strategist at Pepperstone.
“As such, participants seem likely to severely punish any earnings, or guidance, misses, with options tied to the stock pricing a move of +/- 8.5% in the 24 hours following the release.”
Nvidia results once produced spectacular stock movements. This has calmed in recent releases, but it doesn’t mean numbers that deviate materially from expectations spark a sharp reaction this time around.