Nvidia to report Q3 earnings today as AI fever continues to power Wall Street

Nvidia (NVDA) will report its third quarter earnings after the bell today, giving Wall Street its best and latest look into the strength of the artificial intelligence trade.

The world’s largest publicly traded company by market cap, Nvidia’s stock price has continued to rocket higher throughout 2024, thanks to the explosive growth in AI across the tech landscape and beyond. Shares of Nvidia were up 196% year to date as of Wednesday, easily outpacing any of the company’s chipmaker rivals. AMD (AMD), the closest competitor, has seen its stock price sink over 5% year to date, while Intel (INTC), which is contending with a difficult turnaround, has seen its stock plunge nearly 52%.

Nvidia is expected to report Q3 earnings per share (EPS) of $0.74 on revenue of $33.2 billion, according to analysts’ estimates compiled by Bloomberg. That works out to an 83% year-over-year increase on both the top and bottom lines versus the same period last year, when Nvidia saw EPS of $0.40 on revenue of $22.1 billion.

Nvidia’s Data Center segment, its largest business, is set to bring in $29 billion for the quarter. That’s a 100% rise on the $14.5 billion reported in Q3 last year.

Gaming revenue is expected to top out at $3 billion, up 7% from last year, when the segment brought in $2.8 billion.

Analysts are anticipating gross margins to hit 75%.

Investors will be on the lookout for not only whether Nvidia beats on the top and bottom lines for Q3, but also whether it raises its outlook for Q4. Analysts are expecting Nvidia to give guidance of $37 billion in revenue in the quarter.

Even if the AI chip leader delivers a stellar report and outlook, its share price could still fall. Nvidia topped expectations on the top and bottom lines and beat out anticipated guidance in Q2, but its stock dropped 6% immediately after its results.

That could be a sign that some investors weren’t impressed with Nvidia’s performance compared to prior quarters, where it saw revenue growth of 200% and EPS growth of nearly 600%. Or it could simply come down to investors taking profits on their gains.

Investors will also be looking for any insights from CEO Jensen Huang about Nvidia’s next-generation Blackwell line of AI chips, which are used to both train and run AI applications. During the company’s last earnings call in August, Huang said Blackwell production would pick up in Q4, when he expects to see several billions of dollars of revenue from the chips.

At the time, Huang said demand for Blackwell was already outstripping supply, and he anticipated that would continue in the year ahead. What’s more, he said the company’s Hopper chip, the predecessor to the Blackwell line, was expected to continue selling well into Q4.