Will Nvidia's Blockbuster Results Be Enough to Send the Stock Higher?

Core Viewpoint - Nvidia has shown remarkable growth in 2024, with strong demand for its GPUs driving its performance, but initial investor reactions to its recent earnings report have been negative [1][2]. Financial Performance - Nvidia reported record quarterly revenue of $35.1 billion for fiscal Q3, a 94$32.5 billion and consensus estimates of $33.17 billion [4]. - Non-GAAP earnings per share rose by 103$0.81, exceeding the consensus estimate of $0.75 [4]. - The company expects fiscal Q4 revenue to reach$37.5 billion, slightly above Wall Street's estimate of $37 billion [5]. Growth Outlook - The revenue guidance for Q4 indicates a year-over-year increase of nearly 70$22.1 billion, suggesting a relative slowdown in growth [6]. - Nvidia's forecasted non-GAAP gross margin for the current quarter is 73.5%, down from 76.7% in the previous year, indicating margin pressure [6]. Strategic Insights - Despite the anticipated slowdown, Nvidia's growth remains robust compared to competitors like AMD, which is growing at a slower pace [7]. - The margin pressure is attributed to the ramp-up of the next-generation Blackwell AI chips, which is expected to have a short-term impact on margins [8][10]. - Nvidia anticipates that once the production of Blackwell chips meets demand, it will sustain healthy revenue and earnings growth into 2025 and beyond [11]. Analyst Expectations - Analysts project Nvidia will finish fiscal 2025 with $123.5 billion in revenue, bolstered by strong management guidance [12]. - Earnings per share are expected to grow by 48$4.27, with potential for exceeding forecasts if demand for Blackwell processors remains strong [13]. - Nvidia's current trading at 33 times forward earnings is comparable to the Nasdaq-100 index, suggesting potential for further upside if earnings growth continues [14].