NVIDIA (NASDAQ:NVDA) stock will be in the spotlight next week as it publishes its financial results on Wednesday. These numbers will come as it is hovering near its all-time high, with its valuation soaring to $5.46 trillion.
NVIDIA Earnings Growth Likely Continued In Q1
All signs are that NVIDIA's revenue and earnings growth accelerated in the first quarter. Its top suppliers like Taiwan Semiconductor (NYSE:TSM) and Hon Hai have published strong numbers.
At the same time, its top competitors like Advanced Micro Devices (NASDAQ:AMD) and Intel (NASDAQ:INTC) released encouraging numbers, led by their AI-focused businesses.
Most notably, its top clients, including companies like Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META), and Amazon (NASDAQ:AMZN) released good numbers and boosted their capital expenditure guidance to over $725 billion.
Therefore, the average estimate among analysts is that NVIDIA's revenue will be $79 billion, up by 78% YoY. Its earnings per share is expected to jump to $1.78 from the previous $0.86.
Historically, NVIDIA has constantly done better than estimates, meaning that its results will be better than these numbers. If this happens, it is likely that the revenue will soar to over $80 billion.
NVIDIA Stock To React To Forward Guidance
While the Q1 earnings results will be important, the key catalyst for the stock will be its forward guidance. Analysts are predicting that its annual revenue will jump by 72% this year to $372 billion.
Based on the recent announcements, it is likely that the forward guidance will be much higher than what analysts expect. For one, the company will likely account for the Chinese business.
The US has authorized ten Chinese companies, such as Alibaba, ByteDance, and JD to buy the H200 chips. These sales will likely start in the second or third quarters of the year.
Also, the company plans to launch its Vera CPUs, which will be a new category for its business. As the recent Intel earnings showed, there is strong demand for its AI CPUs by hyperscalers. As such, Vera may help to supercharge its growth trajectory.
NVIDIA may also benefit from its recent investments. It has invested in companies like CoreWeave (NASDAQ:CRWV), Nebius (NASDAQ:NBIS), and Lumentum. All these stocks have soared since its investments.
Analysts Are Upbeat About The NVDA Stock
Wall Street analysts tracking the company are upbeat about its future. The average NVDA stock forecast among analysts is $282, with the highest target being $360. The most recent upgrades came from companies like TD Cowen, UBS, RBS, and Cantor Fitzgerald.
In addition to its strong growth, analysts note that the company is currently a bargain, with its forward price-to-earnings ratio being at 28, lower than the five-year average of 54. The multiple is also lower than the PHLX Semiconductor Index, which is at 47. Historically, NVIDIA has always traded at a premium compared to the index.
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