Nvidia may shine again when it reports on Wednesday

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Shares of Nvidia Corp. have been on another tear. The stock is up 47% this year (after more than tripling during 2023) and this week overtook Alphabet Inc. to become the third-largest company in the S&P 500 by market capitalization.

Nvidia
NVDA,
+1.69%

will announce quarterly results next week, and once again the year-over-year comparisons will be astounding because the company continues to dominate the market for graphics processing units (GPU). This was pretty much a new market last year as data centers scrambled to deploy GPUs and related hardware to support their corporate customer’s build-out of artificial-intelligence technology.

Nvidia has an odd fiscal year — Wednesday’s report will be for the fourth quarter of its fiscal 2024, which ended Jan. 29. Since the year-over-year comparison of quarterly results will be so extreme, here’s a look at the past four fiscal quarters’ results, along with consensus estimates among analysts polled by FactSet for the quarter to be reported Wednesday. Sales figures are in millions.

Estimate for quarter ended 1/29/2024

Quarter ended 10/29/2023

Quarter ended 07/30/2023

Quarter ended 04/30/2023

Quarter ended 01/29/2023

Sales

$20,374

$18,120

$13,507

$7,192

$6,051

Change from year-earlier quarter

237%

206%

101%

-13%

-21%

Change from previous quarter

12%

34%

88%

19%

2%

Earnings per share

$4.59

$3.71

$2.48

$0.82

$0.57

Change from year-earlier quarter

704%

1262%

850%

29%

-52%

Change from previous quarter

24%

50%

202%

44%

110%

Source: FactSet

Nvidia’s quarterly sales perked up during the quarter ending April 30, and accelerated from there. For the quarter to be reported next week, the year-over-year sales growth again should be incredibly high. But analysts are expecting the sequential quarterly sales growth to slow to 12% from 34% the previous quarter.

Read: Nvidia is expected to be the best performer in the S&P 500 through 2025, by this measure

Ken Laudan, the portfolio manager of the Buffalo Large Cap Fund BUFEX BUIEX said during an interview with MarketWatch on Thursday that the analysts’ estimates were conservative, because even “hyperscalers” among datacenter operators have been “buying whatever GPUs they can get.”

He expects 2024 to be another year in which the “AI enablers,” or companies making GPUs and related equipment such as Nvidia and Taiwan Semiconductor Manufacturing Co.
TSM,
-1.11%
,
and cloud services providers (Microsoft Corp.
MSFT,
-0.18%
,
Amazon.com Inc.
AMZN,
-0.08%

and Alphabet
GOOGL,
-0.99%

) will continue to dominate AI-related investing.

Laudan expects the focus of the AI build-out to shift to “AI adapters” in 2025 or later. He described this group as “software-centric companies that sell an AI large-language model on top of their enterprise or vertical software stack to their clients.” These might include companies such as Adobe Inc.
ADBE,
-4.79%
,
ServiceNow Inc.
NOW,
-0.92%
,
Salesforce.com Inc.
CRM,
-0.19%
,
MongoDB Inc.
MDB,
-0.87%

and Snowflake Inc.
SNOW,
+0.51%
,
he said.

More coverage of Nvidia:

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Getty Images

On Tuesday, Lyft Inc.
LYFT,
-2.39%

reported its fourth-quarter results, which included a typographical error in the company’s outlook for 2024. An initial aftermarket rally sent the shares up as much as 60%, but that gain was trimmed when Lyft issued a correction.

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UBER,
-2.13%

:


FactSet

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Intuitive Machines, NASA

Shares of Intuitive Machines Inc.
LUNR,
+12.99%

rose 15% on Thursday, after the successful launch of a SpaceX Falcon 9 rocket carrying what is expected to be the first U.S. commercial spacecraft to land on the moon and the first U.S. landing there since 1972. Intuitive Machines built the Nova-C lander, which is expected to touch down near the moon’s south pole next week.

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