Expectations are high for Nvidia Corporation (Nasdaq: NVDA) ahead of its first-quarter earnings report expected out after the market closes on Wednesday. The stock gained nearly 5 percent last week after competitors reported better-than-expected results, and analysts say investors can expect the same from Nvidia.
Analysts are forecasting first-quarter Nvidia earnings per share of $1.45 on revenue of $2.89 billion. Those consensus estimates represent year-over-year earnings growth of 83.5 percent and revenue growth of 49.7 percent.
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However, Nvidia investors may be a bit uneasy this quarter after reports that cryptocurrency mining demand for Nvidia graphics cards has been on the decline. That decline didn’t prevent competitor Advanced Micro Devices ( AMD) from reporting a big earnings beat in late-April.
Despite the uncertainties, Morgan Stanley analyst Joseph Moore is expecting a big quarter from Nvidia.
“There is more controversy than normal this quarter because of cryptocurrency likely rolling off, bringing an end to recent graphics card shortages,” Moore says. “We think Nvidia can easily absorb this impact, with relatively string pent-up demand from gamers given recent shortages and likely a new product cycle at about quarter end.”
Morgan Stanley is anticipating Nvidia will beat consensus estimates for July quarter revenue by 6 percent.
Media reports have suggested that Nvidia’s next-generation Turing graphics cards could provide a 20 to 50 percent performance boost for gamers compared to its current-generation Pascal cards. Up to this point, Nvidia has been mostly mum on Turing performance, pricing or release schedules, but that trend could change on Wednesday.
Bank of America analyst Vivek Arya says Turing card could hit the market this summer.
“NVDA’s typical two-year product release cadence suggests first Turing cards could be unveiled around the E3 gaming show in mid-June, with shipments starting July 2018,” Arya says.
Arya says third-party GPU retailers have benefited from cryptocurrency-related shortages and sky-high prices in the past year. Arya says Nvidia will soon start to benefit from its higher-priced next-generation chips and the shift in the gaming community to higher-end hardware.
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“As gamers/developers demand/deliver more realism, GPU performance requirements will increase, which will continue to drive a mix-shift to higher [average sales price] cards,” Arya says.
J.P. Morgan has an “overweight” rating and $258 price target for Nvidia. Bank of America has a “buy” rating and $300 target for NVDA stock.
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NVDA Stock: What To Expect From Nvidia Corporation Earnings originally appeared on usnews.com
