Nvidia earnings expectations: Will the earnings report push the stock higher?

Nvidia is poised to release its quarterly earnings on Wednesday, 22nd May, amid a surge in success driven by the booming artificial intelligence sector. As the chipmaker rides this wave, all eyes are on the financial impact of these advancements. What will the figures reveal about the tech landscape?

In the current scenario, more than four mega-cap tech giants, including Microsoft, Alphabet, Amazon, and Meta, are investing billions in AI infrastructure. Analysts see this as big business for Nvidia, the dominant player in AI chips.

Nvidia AI chips in high demand

At recent earnings calls, “AI infrastructure” and “generative AI” were all the buzz, echoing a massive surge in spending directed toward Nvidia’s incredibly popular H100 GPU chip. This powerful chip costs north of $40,000 and is the backbone of the AI systems running current platforms, including ChatGPT, among others.

Nvidia could hog the spotlight in the AI space for even longer as the company is set to release its next-generation AI chip, Blackwell. Some analysts see this as a game changer that could further solidify the company’s position, as the go-to choice for AI innovation.

Perhaps the most resounding endorsement for Nvidia came from Tesla’s Elon Musk, who announced plans to more than double the company’s H100 GPU usage by the end of the year. “We expect that to be probably 85,000 or thereabouts,” Musk said, highlighting the H100’s critical role in improving Tesla’s Full Self-Driving software.

Meta Platforms is also betting big on AI, increasing its forecasted 2024 capital expenditures to support its “AI roadmap.” Meta’s recent massive purchase of H100 GPUs – now totalling a whopping 1 million units – underscores just how integral Nvidia’s technology is to the social media giant’s ambitions.

According to many industry analysts, the trend is clear – Microsoft, Alphabet, and Amazon are all significantly ramping up their AI investment. With a projected combined capex of $205 billion this year,  Nvidia is poised to capture a substantial share of this spending as tech giants race to build their AI capabilities.

While rivals like AMD and Intel are vying for a slice of the AI chip market, Nvidia’s current dominance looks secure. Analysts expect Nvidia’s revenue to hit $100 billion this fiscal year, dwarfing the projected sales of its competitors.

Next Nvidia earnings report in focus

Nvidia’s first-quarter results this year have been stellar, and the company’s deep ties to the surging AI sector suggest continued momentum. With tech leaders firmly committed to Nvidia’s AI hardware, traders may want to keep a close eye on the company’s upcoming earnings report.

Analysts expect the high flier stock to report growth in earnings, with a consensus figure of around USD 24.17 billion in revenue and USD 5.49 in earnings per share.

At the time of writing, the bullish outlook for the stock remains intact as it stays above the 100-day Exponential Moving average on the daily chart. The price has been within a descending trend channel since Mid-March that it now appears to be breaking out of, suggesting that a rally could ensue if price decisively breaks above.

Additionally, the RSI is edging up towards the 60 mark, indicating that buyers are still strong and could push the stock closer to the USD 950 mark.

If prices retreat below the 870 level, a short-term consolidation within the descending trend channel cannot be ruled out.

With analysts expecting a positive earnings call, will the report add fuel to its AI-driven momentum, sending the stock to higher highs?

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