Nvidia Q1 Earnings Preview: Can the Chip Giant Keep Up Its Momentum?

Nvidia Stock

Nvidia (NVDA:NSD), the leading chip maker and AI computing company, will report its first quarter 2023 results on Wednesday, May 24. The company is expected to deliver another strong quarter, driven by the growth in its Data Center and Gaming segments. Rosenblatt Securities analyst Hans Mosesmann is bullish on NVDA stock, and his price target of $320 implies about a 10.52% upside potential from current levels.

Nvidia has been on a roll in 2023, gaining about 98% year-to-date. The company has been benefiting from the rising demand for its GPUs (graphics processing units) and DPUs (data processing units) across various markets, such as cloud computing, gaming, autonomous driving, and AI (artificial intelligence). The company has also been making strategic acquisitions and partnerships to expand its reach and capabilities.

Analysts expect Nvidia to report revenue of $6.52 billion, which is in line with management’s guidance. This would represent a sequential improvement from the previous quarter when revenue was $5.8 billion. The company’s CEO, Jensen Huang, said that Q1 would see growth across all its target markets and strong momentum in Data centers and Gaming.

 

Q1 Revenue Expectations: Data Center and Gaming Drive Growth

The Data Center segment is likely to be the main growth driver for Nvidia in Q1, as the company continues to leverage its leadership in AI and high-performance computing. The company’s A100 GPU, which is designed for AI workloads and data analytics, has been adopted by major cloud providers, such as Amazon Web Services, Microsoft Azure, Google Cloud Platform, and Alibaba Cloud. The company has also launched new products and solutions for AI inference, such as the A30 and A10 GPUs and the NVIDIA Jarvis framework.

The Gaming segment is also expected to perform well in Q1, as the company benefits from the strong demand for its GeForce RTX 30 series GPUs, which offer ray tracing and DLSS (deep learning super sampling) features for enhanced graphics quality and performance. The company has also expanded its GeForce NOW cloud gaming service to more regions and devices, attracting more than 10 million members.

 

NVDA Stock-Analysts’ Views:

Analysts expect Nvidia to report earnings of $0.92 per share in Q1, compared to $0.88 in Q4. However, earnings could decline year-over-year, due to higher operating expenses and taxes.

Analysts are optimistic about NVDA stock ahead of Q1 earnings. It has a Strong Buy consensus rating based on 30 Buys and one Hold. The average price target of $288.24 implies no upside potential from current levels.

However, Rosenblatt’s Mosesmann believes that NVDA stock still has room to grow, as he sees Nvidia “driving the biggest technology inflection the world may have ever seen in transformational AI everywhere and in everything.” He also expects Nvidia to raise its guidance for Q2 and Q3.

 

The Takeaway:

Nvidia is a dominant player in the chip and AI market and has a track record of innovation and performance. The company’s Q1 results are likely to demonstrate its momentum and opportunities.

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