Nvidia will announce its earnings for the second quarter (May to July) this Wednesday. Analysts suggest the company’s stock price may not increase sharply unless it delivers a substantial earnings surprise.
Eugene Investment & Securities analyst Lee Seung Woo commented, “Nvidia has projected second-quarter revenues of $28 billion and a gross profit margin (GPM) of 75.5%. However, current consensus estimates put the revenue at around $28.7 billion, with some recent projections climbing to $30 billion.”
He added, “To meet market expectations, Nvidia must report revenue of at least $30 billion. If the company falls short of this figure or fails to achieve a GPM above 78%, the likelihood of a significant stock price increase following the earnings announcement, similar to the previous two quarters, will be limited.”
Previously, Nvidia’s stock surged by 16% and 9% following its last two earnings announcements.
Lee highlighted a significant concern about the potential decline in margins, which had previously been increasing. He pointed out that while revenue is essential, the margins, which have shown consistent growth over the past eight quarters, may start to trend downward.
He also noted that in light of the anticipated interest rate cuts by the Federal Reserve, the critical aspects of this earnings announcement would be the guidance on Blackwell and GPM rather than the results from the second quarter. As the presidential election approaches, these elements are expected to play a key role in shaping the U.S. stock market and tech sector.
