All eyes are on Nvidia’s stock price today as the company is set to report first-quarter financial results after the market closes on Wednesday. Nvidia closed over 3% on Tuesday and expects to open in the green today.
The expectation from the over $3 trillion market cap company is running high, and Wall Street is expecting a record quarter from the world’s second-most valuable company.
“As a market leader in artificial intelligence and semiconductors, Nvidia’s performance could have a strong spillover effect not just on the technology sector, but also on broader U.S. market sentiment, including the Dow Jones, which tends to correlate positively with speculative flows during bullish phases. A better-than-expected report may further boost short-term upward momentum for the Dow,” says Linh Tran, Market Analyst at XS.com.
Nvidia beat analysts’ revenue expectations by 2.5% last quarter, reporting record quarterly revenue of $39.3 billion, up 12% from Q3 and up 78% from a year ago. The company recorded full-year revenue of $130.5 billion, up 114%. The Data Center’ quarterly revenue was $35.6 billion, up 16% from Q3 and up 93% from a year ago.
This quarter, analysts estimate Nvidia to announce quarterly revenue of $43.38 billion, a 66% increase year on year, and adjusted net income of $21.29 billion, or 87 cents per share, up from $15.24 billion, or 61 cents per share, the previous year.
Nvidia has a track record of exceeding Wall Street predictions, smashing revenue estimates by an average of 8.4% over the last two years.
Linh Tran, Market Analyst at XS.com says, “If Nvidia reports better-than-expected results and offers a strong outlook for the second half of the year, it could provide a significant psychological boost to the market and support a continuation of the S&P 500’s recovery. Conversely, if the recent tariff measures—reminiscent of the previous U.S.-China trade war—have weighed on Nvidia’s Q1 revenue and profits, it could trigger a deeper pullback in the tech sector, thereby dragging the S&P 500 to lower levels.”
Traders and investors seem to have placed their bets on Nvidia’s Wednesday earnings results. “Options imply a swing of roughly plus or minus 6.8%, still large for a three-trillion-dollar firm. Investors want confirmation that revenue growth can keep pace with AI demand and that margins remain strong. The stock sits well above its 200-day moving average, yet historical data shows post-earnings pullbacks when pre-release optimism over-extends,” says Ahmad Assiri, Research Strategist at Pepperstone.
Nvidia’s results are always viewed as a verdict on whether tech investors believe the AI boom has legs. Nvidia, the chipmaker titan, stands to benefit from significant AI infrastructure investments from companies like Meta, Google, Apple, Amazon, and Microsoft.
CEO Jensen Huang is expected to be asked about sales to China after the Trump administration earlier this year imposed tighter export controls. Nvidia faces a $5.5 billion charge due to H20 chip restrictions, causing Huang to label these export curbs as a policy failure, prompting China to accelerate AI chip development.
Nvidia shares are down by 2% YTD but are still up about 25% over the past 12 months. Nancy Tengler, CEO and CIO at Laffer Tengler Investments, says, “We were quite impressed with GTC back in March, and NVDA seems to be inking partnerships with everyone. Gross margin might see pressure, as ramp-up costs and component pricing have increased. However, we expect that to stabilize by year-end. We see upside to 1Q results despite the loss of H20 sales to China, and as GB200 rack-scale systems move past initial phases.”