The Question for Nvidia: How Fat Will Its Earnings Be?

Tech is the engine that is driving the stock market’s growth nowadays, and the primary driver of the tech sector is Nvidia, which is up more than 20-fold over five years—much of that since the artificial intelligence craze hit in 2023. Ahead of expected lush earnings when the chipmaker reports this week, the stock rose 2.5% Monday.

When the company announces its April-ending first-quarter results on Wednesday, they are anticipated to confirm huge demand for its chips to power AI systems.

Consensus expectations on Wall Street are for Nvidia to report revenue of $24.53 billion, according to a FactSet consensus. But several analysts have suggested that to meet high market expectations it will likely need to declare around $26 billion for the first quarter and give guidance for a similar level in the current period.

In the January-ending quarter, the company had $22.1 billion in revenue. The first-quarter consensus for earnings per share is $5.17, a vast increase from 82 cents reported for 2023’s initial quarter.

Never miss a story — sign up for CIO newsletters to stay up-to-date on the latest institutional investment industry news. 

Nvidia holds the title as the biggest contributor to earnings growth for the information technology sector. If this company were excluded, the blended (year-over-year) earnings growth rate for the category would drop to 10.8% from 23.6%, per FactSet researchers.

Nvidia shares have surged 91% so far this year through Monday’s close. That compares with the 11% rises in the S&P 500 index and the Nasdaq Composite Index over the same period.

Other members of the so-called Magnificent Seven group of tech stocks displayed good first-quarter results, except for Tesla and Apple, which suffered revenue drops, although their share-price declines this year have evidently stopped.