NVDA Preview: How Well Does it Have to Perform?

Core Viewpoint - Nvidia is set to report its earnings, with significant expectations surrounding its revenue and guidance, particularly in the data center segment, which is crucial for investors [2][3][5]. Revenue Expectations - The consensus expects Nvidia to report earnings of $1.24 per share and revenue of approximately $54.6 billion, with data center revenues anticipated to be around $50 billion [2][3]. - There is a range of expectations for total revenue, varying from $53 billion to $63 billion, indicating uncertainty in market projections [4]. Data Center Segment Insights - Investors are particularly focused on Nvidia's guidance for data center revenues, with a consensus expectation of $57 billion [3]. - The company is expected to provide insights into the demand for its new architecture, Blackwell, and the overall addressable market for the upcoming year [5]. Margin Expectations - The consensus for the data center segment's margin is currently at 75.5%, with expectations for it to rise to 76.3% next year, although there is debate about achieving this target [7][8]. Future Profit Projections - Expectations for future profits vary, with some analysts projecting earnings of $7 per share next year, while others estimate between $8 to $10, driven by bullish assumptions around Blackwell and growth for the upcoming architecture, Ruben [9][10]. - The market is currently experiencing limited supply and high demand, which has benefited Nvidia in recent years [10]. Market Concerns - There are concerns regarding potential overbuilding in the market, which could affect return on investment for shareholders if cloud service providers reduce capital expenditures next year [12].