Nvidia Earnings Preview: NVDA to Roar Higher?
Nvidia Earnings Preview: NVDA to Roar Higher?
The results will close out the earnings season for the three most prominent chip makers in the United States
- Nvidia to report earnings on Wednesday, May 22, after market close.
- Investors expect EPS of $5.48 and revenue of $24.7 billion.
- Demand outlook and supply chain issues in focus for investors.
Nvidia (NVDA) is set to report its 2025 first-quarter fiscal earnings on Wednesday, May 22, after the market closes.
The results will close out the earnings season for the three most prominent chip makers in the United States, following announcements from Intel (INTC) and Advanced Micro Devices (AMD), Nvidia’s main competitors.
NVDA has posted stellar gains so far this year—rising about 90% on a year-to-date basis. That compares to the Nasdaq 100’s 11% gain over the same time. Indeed, the overall chip sector has outperformed—rising about 34% for the year to date—but Nvidia’s performance is undeniable. Will the stellar returns continue after it announces earnings?
What do investors expect?
Analysts expect NVDA to post earnings per share (EPS) of $5.48 and revenue of $24.7 billion, according to Yahoo Finance. That would be up from EPS of $0.98 and revenue of $6.5 billion a year ago, and up from last quarter’s $5.16 EPS and $22.1 billion revenue.
Over the past 30 days, those estimates have come down just a bit, falling from an expected EPS of $5.53. However, the current expected figure is up from $4.87 per share 90 days ago.
Nvidia has exceeded expectations in four of the last four earnings reports, which sets investors up to expect that trend to continue. While competitors like AMD and Intel have made progress, Nvidia holds a commendable lead in the graphic processing unit (GPU) market, commanding about 80% of global market share for the chips—which are preferred for artificial intelligence applications.
Nvidia’s guidance will be key to the stock price reaction on Wednesday and where it opens the following trading day. Data center operators have put out optimistic growth plans that will require a lot of processing power. They will likely have to source much of that from Nvidia. Will this translate into a strong outlook for its chips?
Supply problems will likely need to be addressed in some fashion, as they have been a challenge for the chip sector since the COVID-19 pandemic. Whether Nvidia will be able to keep up with any lofty demand goals is another important question investors want answered.
Trading Nvidia earnings
Nvidia trades with an implied volatility rank (IVR) of 68.8 and the stock is near its all-time highs traded back in March.
The implied move based on the May 24 options expiration strike shows an implied move of +/- 89 points. A hypothetical trade with a neutral to positive outlook would be a short put vertical with the short strike at the implied move, which would be at 860 based on the May 16 price of 948.
With the long strike at the 855 put, it would give a probability of profit of 78% and a max profit of $110 and a max loss of $390.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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