NVIDIA, a leading technology company in the artificial intelligence (AI) sector, has seen its stock price soar to an all-time high, closing at $504. Analysts are anticipating over 170% earnings growth in the company’s fiscal third-quarter results, with even higher growth expected in the fourth quarter. This impressive performance has made NVIDIA the top performer in the S&P 500, with a market cap of $1.2 trillion.
However, there are concerns that any negative news during the earnings call could impact the stock’s performance. Factors such as China restrictions, competition from AMD’s processors, or a slowdown in generative AI enthusiasm could cause concern among investors.
AMD, a competitor in the generative AI market, has been gaining traction and expects significant GPU earnings in the fourth quarter and beyond. This presents a new dynamic for NVIDIA, which has dominated the AI graphics processing unit (GPU) market.
One challenge for NVIDIA is the perception that its products are too expensive for generative AI inference. To counter this, the company recently unveiled the H200, an upgraded GPU designed for training and deploying AI models. This new GPU is an improvement over the H100, which was used by OpenAI to train its advanced language model, GPT-4 Turbo. The H100 chips are part of NVIDIA’s data center business, which saw a surge in earnings in the fiscal second quarter.
Analysts expect continued strong growth in NVIDIA’s data center business, with nearly quadruple growth projected for the fiscal third quarter. Overall, total earnings are expected to rise by 172% to $16.2 billion. However, growth is anticipated to slow down in each quarter of 2024.