Nvidia Q2 2024 Earnings Preview
AI Juggernaut Nvidia’s highly anticipated Q2 2024 earnings report is just one week away, scheduled for release after the market closes on Thursday, 29 August, at 6.20 am (AEST).
Q2 performance expectations
Revenue: $28.544 billion
Revenue growth: 211.31% year-on-year (YoY)
Earnings per share (EPS): $0.64.
Highlights of the previous quarter
Expectations are high for Nvidia’s Q2 earnings, given the company’s leadership in several key growth markets. Over the past year, Nvidia has experienced significant demand across various end markets, driven primarily by data centres and gaming.
In data centres, the adoption of AI and machine learning has propelled strong sales of Nvidia’s specialised GPUs and networking products. Additionally, the company has benefited from shifting enterprise workloads to the cloud. NVidia’s gaming segment continues to thrive, supported by the rise of eSports, game streaming services, and blockbuster game releases optimised for NVIDIA hardware.
What to expect
Nvidia’s data centre segment, which includes sales of GPUs, networking gear, and AI software, is expected to grow further as major hyperscale customers like Amazon AWS, Microsoft Azure, and Alphabet GCP increasingly adopt Nvidia chips for AI workloads.
Ongoing demand for Nvidia’s latest GPUs for gaming and creative applications is anticipated to remain a key driver of revenue growth.
Nvidia’s automotive computing platforms are gaining traction with more electric and autonomous vehicle manufacturers, further boosting demand for the company’s chips. Additionally, the company’s Omniverse 3D simulation platform has seen triple-digit customer growth over the past year, indicating potential future gains in enterprise software.
Potential challenges to watch for
Supply chain constraints: while improving, may still limit upside potential. If foundry and component shortages persist, Nvidia might struggle to meet elevated demand, which could disappoint investors.
A slowdown in the PC market: due to challenging macroeconomic conditions may weaken performance in the graphics segment, dampening overall earnings growth.
Economic uncertainty: could also curb business spending if conditions deteriorate, disproportionately affecting Nvidia's data centre and enterprise segments.
Increasing competition: from companies like AMD and Intel, which are also investing heavily in AI-focused chips, along with big tech and automotive firms developing their own AI chips, could potentially reduce demand for Nvidia’s offerings.
Despite these risks, Wall Street remains bullish on Nvidia stock heading into the Q2 earnings report. Investors are focused on Nvidia’s long-term potential in AI, high-performance computing, autonomous vehicles, and the metaverse. Success in these areas is expected to drive share price momentum post-earnings.
Nvidia Technical Analysis
Nvidia’s share price is up over 159% year-to-date and has almost fully recovered its 35% drop from June to August. The recovery puts Nvidia’s all-time high of $140.76 firmly in focus in the lead-up to next week's earnings, with a sustained break above here opening the way for a push towards $150. On the downside, there is a strong band of support at $100 before the $90.69 low of early August. Not far below here resides the 200-day moving average at $85.26.
Q2 performance expectations
Revenue: $28.544 billion
Revenue growth: 211.31% year-on-year (YoY)
Earnings per share (EPS): $0.64.
Highlights of the previous quarter
Expectations are high for Nvidia’s Q2 earnings, given the company’s leadership in several key growth markets. Over the past year, Nvidia has experienced significant demand across various end markets, driven primarily by data centres and gaming.
In data centres, the adoption of AI and machine learning has propelled strong sales of Nvidia’s specialised GPUs and networking products. Additionally, the company has benefited from shifting enterprise workloads to the cloud. NVidia’s gaming segment continues to thrive, supported by the rise of eSports, game streaming services, and blockbuster game releases optimised for NVIDIA hardware.
What to expect
Nvidia’s data centre segment, which includes sales of GPUs, networking gear, and AI software, is expected to grow further as major hyperscale customers like Amazon AWS, Microsoft Azure, and Alphabet GCP increasingly adopt Nvidia chips for AI workloads.
Ongoing demand for Nvidia’s latest GPUs for gaming and creative applications is anticipated to remain a key driver of revenue growth.
Nvidia’s automotive computing platforms are gaining traction with more electric and autonomous vehicle manufacturers, further boosting demand for the company’s chips. Additionally, the company’s Omniverse 3D simulation platform has seen triple-digit customer growth over the past year, indicating potential future gains in enterprise software.
Potential challenges to watch for
Supply chain constraints: while improving, may still limit upside potential. If foundry and component shortages persist, Nvidia might struggle to meet elevated demand, which could disappoint investors.
A slowdown in the PC market: due to challenging macroeconomic conditions may weaken performance in the graphics segment, dampening overall earnings growth.
Economic uncertainty: could also curb business spending if conditions deteriorate, disproportionately affecting Nvidia's data centre and enterprise segments.
Increasing competition: from companies like AMD and Intel, which are also investing heavily in AI-focused chips, along with big tech and automotive firms developing their own AI chips, could potentially reduce demand for Nvidia’s offerings.
Despite these risks, Wall Street remains bullish on Nvidia stock heading into the Q2 earnings report. Investors are focused on Nvidia’s long-term potential in AI, high-performance computing, autonomous vehicles, and the metaverse. Success in these areas is expected to drive share price momentum post-earnings.
Nvidia Technical Analysis
Nvidia’s share price is up over 159% year-to-date and has almost fully recovered its 35% drop from June to August. The recovery puts Nvidia’s all-time high of $140.76 firmly in focus in the lead-up to next week's earnings, with a sustained break above here opening the way for a push towards $150. On the downside, there is a strong band of support at $100 before the $90.69 low of early August. Not far below here resides the 200-day moving average at $85.26.
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