PRIMER: Nvidia (NVDA) earnings due Wednesday, 23rd August after the closing bell at 21.20 BST/16:20 EDT.

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  EXPECTATIONS: Q2 23 (USD): EPS (exp. 2.09), revenue (exp. 11.224bln). FY24 EPS view (exp. 8.25), revenue view (exp. 44.5bln). Q3 23 EPS view (exp. 2.39), revenue view (exp. 12.609bln). 

Revenue breakdown

• DataCenter (exp. 7.691bln)


• Gaming (exp. 2.4bln)


• Automotive (exp. 317mln)


• Professional visualisation (exp. 308mln)


• OEM and IP (exp. 101mln)

Analysis

• According to Refinitv/Reuters data, tech earnings so far have predominantly beaten estimates with 93% beating, 2% being in line, and 5% missing expectations, showing a quarterly surprise of 7.6% for the sector overall. Looking at the subsector, Semiconductor & Semiconductor Equipment, 94% have beaten with 6% being in line with estimates, showing an overall quarterly surprise of 18.4%, making it one of the outperforming sectors over the latest earnings season, only falling behind the 23.5% upside surprise in autos (TSLA, GM, F, BWA, APTV), and the 26.3% upside surprise in the retail sector (AMZN, AZO, EBAY, HD, TJX etc).


• Nvidia (NVDA) has surged 221% YTD on AI optimism given it is a huge beneficiary with its equipment a necessity for those looking to build powerful AI tools, helping take its market cap north of USD 1tln.


• The strength in the stock now sees it hold a 4.3% weight in the Nasdaq 100 and a 2.9% weighting in the S&P 500.


• Just Monday alone it rose another 8.5% in anticipation of its earnings where analysts are seemingly more and more optimistic about their results following a slew of PT upgrades.


• 15 Analysts rate NVDA as a strong buy, while 29 have it as a buy, 6 are hold and 1 recommends a sell, with 0 holding a strong sell opinion on the Co.


• Analysts at Zacks recall the Q1 report, where it saw huge beats on both EPS and revenue, which helped the stock rally 24% in the following week. With the strong outperformance in NVDA, analysts have been heavily raising expectations with the quarterly estimates expected to show a 304% Y/Y gain in EPS and revenue is expected to show a 65% Y/Y gain.


• KeyBanc, HSBC and BMO were the latest to raise their forecasts for the name ahead of earnings, all citing the longer term potential and guidance given accelerating AI trends.

23 Aug 2023 - 20:30- EquitiesResearch Sheet- Source: Newsquawk