Artificial intelligence chipmaker Nvidia is poised to announce its third-quarter fiscal 2025 results on November 20. According to analysts, Nvidia is set to showcase impressive growth, with earnings expected at $0.75 per share and revenue predicted to reach $33.09 billion, reflecting an 88% and 82.6% year-over-year increase, respectively. The company has seen its stock price surge over 180% in the past year, affirming its status as a leading performer in the AI sector.
Nvidia’s anticipated earnings report and implications
On November 20, Nvidia (NVDA) will report its financial results for Q3 FY25, which concluded in October 2024. The expected strong performance is attributed to robust demands for its current generation of GPUs and a solid consensus among analysts, including a significant boost in earnings estimates. Initially, Nvidia guided for revenue of approximately $32.5 billion, but analysts now project a higher figure. Since the company released its guidance, analysts have raised profit forecasts, and the consensus earnings estimate is now $0.74 per diluted share.
Over the past week, analysts have maintained their positive outlook, suggesting growing confidence in Nvidia’s capabilities, especially in the AI and data center markets. Nvidia’s hardware and software positions it well to leverage opportunities in the rapidly evolving AI landscape. Analysts have collectively raised their price targets, suggesting an average of around $156, which indicates a potential 10% upside from its current share price of $142.
Tesla’s stock gest a 7% boost as Trump turns up the heat on self-driving
Core reasons behind Nvidia’s expected growth
Nvidia’s anticipated growth is underpinned by three key factors. First, the company is likely to provide a promising update regarding its Blackwell GPUs. With over 80% market share in AI accelerators, Nvidia’s GPUs are integral to modern AI functionalities. CEO Jensen Huang previously stated that the Blackwell launch could be the most successful in the company’s history. Nvidia’s production ramp begins this quarter, with a backlog of orders extending for a year, signaling strong demand.
Second, Wall Street analysts have revised their earnings estimates upwards. The anticipated revenue increase highlights sustained demand for Nvidia’s existing Hopper GPUs, which indicates solid momentum leading into Q4.
Finally, significant capital investments in AI by tech giants like Alphabet, Amazon, Meta Platforms, and Microsoft are creating a favorable environment for Nvidia. These companies have expressed intentions to substantially increase spending on capital expenditures through 2025, which should bolster demand for Nvidia’s products.
Investor sentiment and market outlook
Investor sentiment remains largely bullish. Analysts have pointed to Nvidia as an attractive investment option, reflecting confidence in the company’s growth trajectory, particularly in AI and data center segments. Despite a stellar stock rally, analysts continue to highlight Nvidia’s strong upside potential, as evidenced by the consensus of 39 Buy ratings and three Hold recommendations over the past three months.
However, challenges remain on the horizon. Some bearish analysts caution against potential excess inventory, rising competition from in-house solutions, and regulatory scrutiny, including an investigation by the U.S. Department of Justice. Furthermore, the Blackwell supply chain has raised concerns about short-term margin pressures and production difficulties.
Options traders are anticipating a notable move in Nvidia’s stock post-earnings, projecting an expected movement of 9.83% in either direction. This illustrates the market’s expectations for volatility following the release of the financial results.
Featured image credit: m./Unsplash
