The artificial intelligence (AI) boom will get another big test this week.
Nvidia (NASDAQ: NVDA), the chipmaker that has become the flag-bearer for the generative AI revolution, will report fourth-quarter earnings after hours on Wednesday, and you can bet Wall Street will be standing by with rapt attention.
After all, Nvidia is now up nearly 400% since the start of 2023 and has gained 46% this year alone as its hardware has helped lead the artificial intelligence charge after ChatGPT was launched. Nvidia recently passed Amazon and Alphabet to become the third-most valuable U.S. company with a market cap of $1.8 trillion, behind only Microsoft and Apple.
Nvidia has become the bellwether for the AI boom, so it’s only natural to speculate about its upcoming earnings report. Is it the right move to buy the AI stock before its fourth-quarter numbers come out? Let’s take a look at the available evidence to see the best decision.
Image source: Getty Images.
What to expect from Nvidia on Wednesday
Nvidia has seen extraordinary demand for its GPUs, accelerators, and other chips that are well suited to run the kind of AI models that make programs like ChatGPT work, and Wall Street has had trouble keeping up with the surge in demand for Nvidia’s products.
The chip titan has breezed past Wall Street estimates and typically gives guidance well ahead of the consensus. Wall Street estimates have steadily floated higher for Nvidia in recent months.
For the fourth quarter, analysts expect revenue to skyrocket 237% to $20.4 billion, and see earnings per share jumping from $0.88 to $4.56.
Those are lofty expectations, but they aren’t unwarranted. In its third quarter, Nvidia’s revenue soared by 206% to $18.1 billion, and it forecast revenue of around $20 billion in the fourth quarter.
Nvidia’s partners have smashed estimates
There’s also evidence that the AI boom is still picking up speed based on reports from some of Nvidia’s partners.
Arm (NASDAQ: ARM) shares soared after it showed off accelerating revenue growth in its recent earnings report and touted a surge in AI-related demand. Arm…
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