Shares of Nvidia closed up 2.3% at an all-time high, topping $504 on Monday. The record comes ahead of the company’s fiscal third-quarter results on Tuesday, when analysts are expecting to see revenue growth of over 170%.
If that’s not astounding enough, the company’s forecast for the fiscal fourth quarter, according to LSEG estimates, is likely to show an even bigger number: almost 200% growth.
Heading into the Thanksgiving holiday, Wall Street will be closely scrutinizing the company that’s been at the heart of this year’s artificial intelligence boom.
Nvidia’s stock price has ballooned 245% in 2023, far outpacing any other member of the S&P 500. Its market cap now sits at $1.2 trillion, well above Meta or Tesla. Any indication on the earnings call that generative AI enthusiasm is cooling, or that some big customers are moving over to AMD’s processors, or that China restrictions are having a detrimental effect on the business could spell trouble for a stock that’s been on such a tear.
“Expectations are high leading into NVDA’s FQ3’24 earnings call on Nov-21,” Bank of America analysts wrote in a report last week. They have a buy rating on the stock and said they “expect a beat/raise.”
However, they flagged China restrictions and competitive concerns as two issues that will capture investor attention. In particular, the emergence of AMD in the generative AI market presents a new dynamic for Nvidia, which has mostly had the AI graphics processing unit (GPU) market to itself.
AMD CEO Lisa Su said late last month that the company expects GPU revenue of about $400 million during the fourth quarter, and more than $2 billion in 2024. The company said in June that the MI300X, its most advanced GPU for AI, would start shipping to some customers this year.
Nvidia is still by far the market leader in GPUs for AI, but high prices are an issue.
“NVDA needs to forcefully counter the narrative its products are too expensive for generative AI inference,” the Bank of America analysts…
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