NVIDIA Corporation (NASDAQ: NVDA), a pioneer in the development of graphic processing units, is currently ruling the artificial intelligence chip market, thanks to its aggressive AI strategy. When the company reports second-quarter results next week, the market will keep a close eye on the event looking for cues on the latest trends in the AI chip market.
The stock set a new record in mid-June this year after the price more than doubled in the first half, and Nvidia emerged as the most valuable company in the world. However, the shares withdrew from the peak in the following weeks, before returning to the growth path last month. NVDA is once again hovering near its all-time high, ahead of the earnings. The market’s bullish outlook indicates the stock has more room for growth, which makes it a promising investment option for the long term.
Strong Estimates
Recently, Nvidia executives forecasted revenues of $28 billion for the second quarter, the report for which is expected on Wednesday, August 28, at 4:20 pm ET. That is slightly below analysts’ revenue forecast of $28.59 billion but well above the $13.5 billion revenue the company generated in the prior-year quarter. Experts’ consensus earnings estimate, excluding special items, is $0.64 per share for Q2, compared to $0.25 per share in the same period of FY24.
Right now, Nvidia is leading the revolutionary transformation of traditional data centers into centers of accelerated computing, by harnessing artificial intelligence. Tech hyperscalers, including internet companies and developers of AI models, are currently investing heavily in modern data centers powered by Nvidia’s AI solutions.
Dominance
The company’s state-of-the-art AI chips, combined with a first-mover advantage, give it a clear edge over rivals when it comes to tapping into emerging opportunities. According to the Nvidia leadership, the eagerly-awaited Blackwell platform, which is expected to revolutionize scientific computing with significantly higher speeds and energy efficiency, is in full production.
From Nvidia’s Q1 2025 earnings call:
“Companies and countries are partnering with NVIDIA to shift the trillion-dollar installed base of traditional data centers to accelerated computing and build a new type of data center, AI factories, to produce a new commodity, artificial intelligence. AI will bring significant productivity gains to nearly every industry and help companies be more cost- and energy-efficient while expanding revenue opportunities. CSPs were the first generative AI movers. With NVIDIA, CSPs accelerated workloads to save money and power.”
Financials
In the first three months of fiscal 2025, revenue more than doubled to about $26 billion, continuing the trend seen in each of the trailing three quarters. The impressive top-line performance reflects strong revenue growth at the Data Center division and a double-digit increase in Gaming revenue. As a result, adjusted earnings climbed to $6.12 per share in the April quarter. Unadjusted profit grew more than 100% to $14.88 billion or $5.98 per share, compared to the first quarter of 2024. In the past six quarters, earnings consistently beat the Street view.
After starting the week on a high note, Nvidia’s shares experienced weakness on Tuesday and traded lower in the early hours. At $130, the last closing price is well above the twelve-month average of $76.56.