Silicon Valley giant Nvidia is set to release its Q4 fiscal 2024 financial results shortly, with high anticipations of smashing previous records.
The tech powerhouse, home to several market-leading semiconductor solutions, stands to outperform previous forecasts, thanks to a surge in demand, primarily driven by artificial intelligence (AI) and their robust Data Centre business operations.
Skyrocketing Projections Amid AI Boom
Figuring prominently at the top of Wall Street’s watchlist, Nvidia’s Q4 earnings projections are optimistic, underpinned by AI demand and heightened price target revisions ahead of the Q4 release.
Prominent among these voices is Vijay Rakesh of Mizuho Securities, who identifies Nvidia as an outstanding prospect for AI and machine learning (ML). In a note to investors, Rakesh reported that Nvidia’s demand currently surpasses supply, suggesting an imminent spike in sales numbers.
Additionally, Rakesh impressively revised Nvidia’s fiscal 2025 and 2026 sales growth estimates, further fueling expectations with an increased price target.
Explosive Revenue Growth on the Horizon
Upon examining projections, Nvidia’s Q4 growth trajectory seems nothing short of exponential. Anticipations indicate more than a threefold increase in Q4 revenue compared to the previous year, with the figure estimated at $20.37 billion compared to $6.05 billion.
This surge is attributed to the sustained momentum within their Data Center business, particularly with the NVIDIA HGX platform’s continued rollout. Nvidia’s earnings per share (EPS) are also set to climb, predicted at an impressive $4.59 in Q4, symbolizing a year-over-year growth of 422%.
Pondering Nvidia’s Investment Attractiveness
While impressive figures substantiate Nvidia’s investment potency, some caution surrounds its already soaring stock, which has risen approximately 47% year-to-date. The analysts’ average price target indicates a modest upside potential of 2.86%, urging potential investors to reconsider.
Notably, this sentiment is echoed by Susquehanna analyst Christopher Rolland, who believes that short-term gains might already be priced into the stock despite expectations of a strong Q4 performance.
However, as he predicates the future trajectory of Nvidia stock on the ‘beat’s magnitude,’ Rolland maintains his ‘Buy’ recommendation, adding to the optimistic investment landscape.
Taking Cues from Options Trading
The sentiment within the options market also reflects high anticipation surrounding Nvidia’s upcoming earnings release. Options traders forecast an 11.14% move in NVDA stock on earnings, markedly more than the previous quarter’s earnings-related move of -2.46%.
Conclusion: Upsurge or Stasis Ahead?
As Wall Street and tech enthusiasts worldwide wait for Nvidia’s Q4 release, the consensus remains cautiously optimistic. The company’s AI-powered Data Center business seems set to propel sales and earnings.
However, the recent shares’ rally could suggest pre-emptive absorption of potential gains, pointing to an interesting tussle between market dynamics and the company’s performance, the outcome of which will steer the trajectory of Nvidia’s stock over the coming months.
