HSBC Predicts Nvidia's Massive $30 Billion Revenue Surge | Nvidia Stock | NVDA Stock | NVDA

also want to see how you see today's shaping up what's your WX word of the day Juggernaut is my wex word for the day and I can't think of any better uh company to represent a juggernaut than Nvidia and nvidia's earnings this Wednesday have the potential to actually change investor psyche and also the outlook for AI investing overall think about what lies ahead for NVIDIA right now I think they're going to report strong earnings strong revenues and strong forward-looking guidance we also know they're spending in the data center space which they call AI factories they're going to confirm their rollout schedule not just for Blackwell Ultra next year but Reuben and Ruben Ultra in the following two years Nvidia is becoming the Hub of the AI ecosystem very similar to that how Amazon has become the Hub of the e-commerce ecosystem the most significant stock of 2024 has been Vidia the company's massive sales and earnings growth was fueled by Rising demand for artificial intelligence Ai and the business momentum resulted in incredible valuation gains the processing leader share price has increased 161% in just this year's trading and its remarkable performance has served as a bullish Catalyst for the market as a whole as well as other individual players in the AI space now Nvidia stock is about to enter its next major test the company will release its fiscal Year's second quarter results on Wednesday August 28th after the market closes management will will also hold a conference call to provide investors with more information about the company and its Outlook there is a lot of expectation on Wall Street for this year's most significant stock market event which is probably the earnings announcement many people are speculating about whether Nvidia will surpass earnings estimates and my prediction is that the Behemoth in artificial intelligence will easily surpass most targets but fasten your seat belts this one might get crazy Nvidia management provided a second quarter sales forecast about $28 billion in its fiscal 2025 first quarter report achieving that goal would entail 107% annual sales growth for the company additionally nvidia's management projects a gross margin increase of 74.8% even more optimistically Wall Street says such statistics are nothing to sneeze at with the leading AI company expected to generate $ 28.6 billion in sales during that time according to average analyst estimates the business has so far amassed a remarkable run of performance beats check out the table below which Compares nvidia's Revenue over the last four reported quarters against Wall Street projections sales beats coupled with the company's impressive margins have resulted in earnings that have exceeded wall Street's expectations the company's quarterly non-app adjusted earnings over the past year have on average exceeded the midpoint Wall Street stre projection by 17.3% with its most recent quarterly report Microsoft announced capex of $19 billion up 35% from the previous quarter and with management indicating that spending is poised to continue rising over the next year this is a clear bullish indicator for NVIDIA and it increases the likelihood that the company will beat both its own targets and the average Wall Street estimates the following are the reasons why Nvidia should beat these estimates if you want to keep up with nvidia's latest updates and keep up with the stock market latest news you can subscribe to our investing tutorial Channel as we post daily updates about the biggest changes and Catalyst in the market so click the Subscribe button if you don't want to miss the newest Market updates now back to today's video the biggest test for the markets this week well it is NVIDIA the highly anticipated results that we are going to get on Wednesday after the Bell the stock is up 160% so far this year the chipmakers earnings are B going to spark a rally we want to bring in Ruben Roy he's Steel's managing director and applied technology analyst Ruben it's great to have you here so I think the big question here for so many investors is whether or not this is going to be a beat and raise quarter for NVIDIA what do you think the setup looks like hey good morning thanks for having me well I I think it needs to be a beaten rage quarter because I think that's uh sort of built in to investor expectations certainly the discussions that we're having would Su suggest that there's widely anticipated um expectations for a beat uh for the July quarter earnings and then a u sort of a beat on the uh the guidance for the October quarter the focus of course is going to be on the data center segment which is where all the AI action is both for AI compute and AI networking and I'd say the data points coming through June quarter earnings would suggest that the AI as you mentioned at the AI trade is still on the AI investment cycle is still on the uh CeX from the cloud service provider was up higher than expectations and I think the guidance and outlook for most of those companies was also up as you look for the towards the back half of the year and then other supply chain companies like Taiwan semi which manufactures Nvidia ships or super micro uh which makes a lot of the the servers that are used in in the cloud service provider networks also had really really uh significant uh beats and raises and so we think the setup's uh pretty strong here going into not just the software Behemoth recently revealed positive capex news another significant Nvidia client meta platforms increased the range of its capital spending guidance when it released its second quarter results at the end of the previous month it seems that many of the top Tech businesses have a general consensus that investing extensively in a now is preferable to running the risk of falling behind or having to catch up to Rivals that together with encouraging capital expenditure data from major tech companies is encouraging for NVIDIA and I predict the the business will surpass both top and bottom line estimates in key2 although $28.6 billion is the average Wall Street projection for nvidia's second quarter sales several analysts have set a much higher goal for instance HSBC anticipates that the company will report $30 billion in sales over that time although it's not always the case a firm can often see bullish valuation momentum if it beats the average Wall Street Target particular particularly hot stocks are frequently held to Greater standards as investors anticipate that the company will meet or beyond their high expectations for performance it's also important to note that during the course of the last reporting year Wall Street analysts have been increasingly accurate in their assessments of the company's performance with nvidia's quarterly sales beating expectations which were 20.4% in the second quarter of last year and 5.6% in the first quarter of this year there are further factors that could cause volatility trading following earnings even if Nvidia is able to significantly surpass typical Wall Street estimates the company's outlook for the upcoming quarter and its road map will also be closely scrutinized by investors and rumors have it that the leader in artificial intelligence is postponing the delivery of its next Generation Blackwell processors the Blackwell news that Invidia shares might cause significant swings in the market price consequently investors should be aware Ware that even in the event that the ad luminary produces impressive key2 Results post earnings price turmoil may be on the horizon it makes more sense to approach an Nvidia investment with the company's long-term vision in mind rather than attempting to time short-term buying and selling moves around what the share price will do shortly after earnings overall things still appear to be very positive in that regard so what does this really mean for nvidia's stock let's find out but first if you made it this far into the video thank you these videos take a lot of effort and time to make so if you enjoyed them please hit the like button subscribe to the channel this goes a long way in helping us grow that said back to the video and as we think about what we've heard over the course of this earning season companies who are getting out in front of their investors and their analysts and saying well here's why we need to spend this much because the risk of underinvestigated demand as well how much should Nvidia continue to make sure that it's showing investors that it is investing itself and putting capex towards even more of those solutions that they could bring to Data Centers uh and and what does that look like for investors as well here evaluating what that spend looks like going forward yeah Brad that that is the the biggest debate sort of we're having with investors which is you know this idea that okay there's a lot of investment going on today but what's the ROI what the look like and and wonder way you're going to start to see some of these Enterprise uh companies that are investing a lot today make uh make money on this stuff I'd say you know on your on your point about Nvidia certainly from an R&D perspective Nvidia is investing quite aggressively they've accelerated Cadence at which they bring out uh compute Technologies to the marketplace so um we've got the H series of uh gpus Hopper 100 Hopper 200 out today uh Nvidia you know widely has um talked about the the Blackwell series which is coming out and and we can talk about that you know some some chatter in the market about potential delays and whatnot but you know that that's on track we think to to Really ramp in 2025 and then just behind that there's a new architecture that Nvidia announced earlier this year called Ruben that's coming out in 2026 and so they're investing they're investing on new technologies faster than we've ever seen and then on the flip side if you look at the m&a landscape you know there there's a lot going on early last week AMD announced that were going to buy ZT systems which is essentially a manufacturer of uh you know massive servers AI servers that then get installed in data center networks and so you know why do they do that well they're they're doing that to acquire a lot of Engineers that are experts in you know sort of the next generation of data center architectures which are changing very very quickly based on these compute technologies that companies that convid and AMD are coming out with and so there's a lot going on that would suggest that the investment cycle continues and to your point a lot of companies I absolutely agree that we speak to say they'd rather overinvestment reporting monster sales growth the statistics while generally favorable felt short of what many investors had hoped for growing Capital expenditures for most Silicon Valley corporations particularly those like alphabet and Microsoft that construct and run the enormous data centers that are primarily responsible for the internet as we know it were a big worry on order to train and operate generative AI systems these Cloud providers have been investing enormous sums of money on data center upgrades over the past few years and they show no signs of slowing down in Silicon Valley there's an arms race going on and nobody wants to fall behind take a look at Microsoft's and alphabet's capital expenditure increases over the past 3 years when a dominated the new cycle in 2023 you can see the significant leap this capital expenditure growth is only intensifying and persisting in 2023 alphabet invested over $32 billion this year it is expected to spend roughly $50 billion for NVIDIA the supplier for a large number of these infrastructure purchases this is fantastic news sure a significant amount of this revenue is making its way into invidious coffers but not all of it does for a while to come these data centers will need to be upgraded and expanded and Nvidia will be there to help second Nvidia may have a new and significant source of income the majority of the excitement surrounding nidia's technology is sent Ed around its chips even though this will still remain the company's Mainstay Nvidia is growing the range of products it offers into a crucial area networking to put it plainly data must move ethernet-based networks have been utilized in data centers for this purpose historically but AI can produce too much data too quickly for these systems to handle ethernet can be replaced by other Technologies but the cost of retrofitting data centers with them is very high this is where nvidia's new ethernet-based AI networking technology spectrx comes into play single data ports are still Backward Compatible with older ethernet standards and are capable of handling data rates of up to 800 gigabits per second with minimal latency this makes it possible to replace some parts without having to totally redo the network architecture of the data center all at once however spectrx is not the sole product of its kind available in the market for example broadcom already offers something comparable but I believe Nvidia will take a sizable chunk of the market in this case because their solution will play nice with nid chips when combined the components will be maximized for Optimal Performance Nvidia is creating an environment to incentivize customers to remain with its products in a year or two this could easily become a multi-billion dollar source of income number three Nvidia stated that its newest chip will be delayed but I don't think this will make a difference Nvidia promised to upgrade its Flagship artificial intelligence processor annually that's a really demanding order with limited margin for error it appears that the corporation has already made a mistake the company declared that the release of their Blackwell a accelerator chips would be delayed following the discovery of fault in them the bottom line of the business is not going to be significantly impacted by this in my opinion the Blackwells are meant to take the place of its Hopper chips which can currently satisfy the demands of its hyperscaler clients the potential loss from the postponed Blackwell deployment will most likely be offset by their sales