The $3.6 trillion company commands a nearly 80% share of the market for high-end AI-powering chips and processors. Its top customers include the likes of Google parent Alphabet (GOOGL) , software giant Microsoft (MSFT) and electric vehicle maker Tesla (TSLA) .
"Nvidia’s earnings on Wednesday will be the grand finale of the earnings announcement season," said Louis Navellier, chairman and founder of Navellier & Associates. "Starting in the fourth quarter, Nvidia’s new Blackwell GB200 GPU will dominate its sales for the next couple of years."
Since Nvidia spent roughly $2 billion developing the Blackwell GPU, Navellier said, the company "has no competitors, and as it develops even more powerful GPU successors to Blackwell, I do not expect any competitor to crack Nvidia’s monopoly on generative AI."
The Nvidia story got a jolt of drama recently after the Information reported that the artificial-intelligence-chip maker is struggling with overheating issues with its Blackwell processors when they're installed in high-capacity server racks.
The company reportedly has been forced to redesign server racks several times to overcome the overheating problems.
Word of the repeated design changes has sparked concern among customers about potential delays in installing the new AI data center technology, the report said.
Nvidia Co-Founder and CEO Jensen Huang
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Nvidia CEO: Blackwell chip demand insane
Co-Founder and CEO Jensen Huang has called demand for the new Blackwell AI chips “insane.”
Blackwell chips, as a stand-alone, are said to be around two and a half times faster than Nvidia's legacy H100 chips, also known as Hopper, when used to train large-language AI models like OpenAI's ChatGPT.
And they're around five times faster when used to run those models in real applications, a process called inferencing.
Nvidia's shares ended in the red on Nov. 18. TheStreet Pro’s Doug Kass noted that he had highlighted the potential cooling problems with the company's Blackwell chips "in the first week of September 2024 (that was two and a half months ago)."
CNBC's Jim Cramer had a different take on the Information's story.
"Usual short-planted story going around about how Nvidia's Blackwell is not as easy to set up as people thought," Cramer posted on X on Nov. 17.
"I have read this story for months now. Of course Nvidia is in quiet period and can't defend itself. ... Tiresome attempt by a publication constantly in search of relevancy."
Nvidia's stock has tripled (up 192%) from a year ago and closed up 4.9% at $147.01 on Nov. 19.
TheStreet Pro’s James “Rev Shark” DePorre wrote on Nov. 14 that Nvidia is the only one of the so-called Magnificent Seven — which include such tech titans as Amazon (AMZN) , Apple (AAPL) and Facebook parent Meta Platforms (META) — that he owns. “It will remain a good play into its earnings report," he wrote.
"Nvidia is often lumped in with all the other AI plays, but there is a significant difference," he said. "Nvidia provides the tools that are used in the development of AI."
He added that the big risk for Nvidia and chip stocks in general was an economic slowdown.
"However, it is likely that AI investment in infrastructure will remain for quite a while," DePorre said. 'It is unlikely that Nvidia will hit top cyclical earnings anytime soon."
Analyst expects beat/raise scenario
TheStreet Pro’s Stephen "Sarge" Guilfoyle echoed that demand for Blackwell chips is “through the roof.”
"I don't doubt Nvidia going into this quarter," the veteran trader told TheStreet anchor Conway Gittens. "I just wonder how far we can go with this before margins at least contract."
The company is expected to post 75 cents of earnings per share, according to LSEG consensus estimates. Analysts polled by LSEG are expecting around $33.12 billion in revenue, which would be nearly 83% growth from a year earlier.
Investment firms have been adjusting their price targets for Nvidia ahead of the company's quarterly results.
Truist raised the investment firm's price target on Nvidia to $167 from $148 and maintained a buy rating, according to The Fly.
The firm said that it expected Nvidia to post results above the analyst consensus while also expressing confidence in 2025 owing to a robust backlog.
Nvidia's management commentary will focus on the next drivers of growth after large language models — data processing and physical AI — and Truist is raising its estimates based on higher growth expectations in the data-center end market.
Its fiscal 2024 earnings per share view is up 4 cents to $2.85 and the fiscal 2025 view was raised 49 cents to $4.18, Truist said.
Large language models can perform a variety of tasks, including generating human-like content, analyzing data and improving customer experience.
Stifel raised its price target on Nvidia to $180 from $165 while maintaining a buy rating on the shares.
Supply-chain data points as well as discussions with industry participants remain skewed positively, and the investment firm expects "another beat-and-raise scenario," the firm said.
Stifel said that expectations are elevated and this scenario appears to be widely anticipated given that consensus estimates for fiscal years 2026 and 2027 have moved roughly 4% higher over the past two weeks,
The firm's checks suggest that a Blackwell-driven inflection to the upside is more likely to occur in the April quarter than the January quarter. Stifel said "a diverse set of data points support the positive revisions."
