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NVIDIA (NVDA) to Report Q2 Earnings: What's in the Offing?
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NVIDIA Corporation (NVDA - Free Report) is slated to release second-quarter fiscal 2021 results on Aug 19.
For the fiscal second quarter, the company expects revenues of $3.65 billion (+/-2%). The Zacks Consensus Estimate for the same is also pegged at $3.65 billion, calling for 41.7% growth, year on year.
The Zacks Consensus Estimate for quarterly earnings is pinned at $1.93, suggesting a year-over-year improvement of a whopping 55.7%.
The company’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 10.4%.
Let’s see how things have shaped up for the announcement.
Factors at Play
NVIDIA’s fiscal second-quarter performance is likely to have benefited from growth across all of its business segments except for automotive. The company’s growth opportunities in ray-traced gaming, rendering, high-performance computing and AI are likely to have been driving factors during the period in discussion.
NVIDIA’s performance is also anticipated to have benefited from strength in its data-center business on the growing adoption of cloud-based solutions amid the coronavirus crisis-induced work-from-home wave. Increase in Hyperscale demand and growing adoption in the inference market are anticipated to have been tailwinds during the to-be-reported quarter.
Further, a series of blockbuster AAA titles, which pledged support for the NVIDIA RTX ray tracing technology, might have been a positive. In third-quarter fiscal 2020, NVIDIA announced that Microsoft’s (MSFT - Free Report) Minecraft game will feature the technology. In addition, the recently-released GeForce RTX SUPER GPUs are expected to have fortified its leadership in the high end of the market.
Additionally, the pandemic-induced work-from-home wave is likely to have bolstered sales of graphic chips utilized in desktops and laptops, which, in turn, is anticipated to have aided the quarterly performance.
Nonetheless, disruptions in retail channel sales due to the global lockdown might have partially offset the benefit of strong demand for the remote working and online learning hardware infrastructure.
Moreover, the pandemic might have adversely impacted the company’s automotive segment during the quarter under review. Notably, travel restrictions as well as economic and business uncertainties have hit global vehicle sales hard.
What Our Model Says
Our proven model does not predict an earnings beat for NVIDIA this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
NVIDIA currently carries a Zacks Rank of 3 and has an Earnings ESP of -6.89%.
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:
Autodesk has an Earnings ESP of +4.44% and carries a Zacks Rank of 3, currently.
Fabrinet (FN - Free Report) has an Earnings ESP of +3.75% and currently carries a Zacks Rank of 3.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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NVIDIA (NVDA) to Report Q2 Earnings: What's in the Offing?
NVIDIA Corporation (NVDA - Free Report) is slated to release second-quarter fiscal 2021 results on Aug 19.
For the fiscal second quarter, the company expects revenues of $3.65 billion (+/-2%). The Zacks Consensus Estimate for the same is also pegged at $3.65 billion, calling for 41.7% growth, year on year.
The Zacks Consensus Estimate for quarterly earnings is pinned at $1.93, suggesting a year-over-year improvement of a whopping 55.7%.
NVIDIA Corporation Price and Consensus
NVIDIA Corporation price-consensus-chart | NVIDIA Corporation Quote
The company’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 10.4%.
Let’s see how things have shaped up for the announcement.
Factors at Play
NVIDIA’s fiscal second-quarter performance is likely to have benefited from growth across all of its business segments except for automotive. The company’s growth opportunities in ray-traced gaming, rendering, high-performance computing and AI are likely to have been driving factors during the period in discussion.
NVIDIA’s performance is also anticipated to have benefited from strength in its data-center business on the growing adoption of cloud-based solutions amid the coronavirus crisis-induced work-from-home wave. Increase in Hyperscale demand and growing adoption in the inference market are anticipated to have been tailwinds during the to-be-reported quarter.
Further, a series of blockbuster AAA titles, which pledged support for the NVIDIA RTX ray tracing technology, might have been a positive. In third-quarter fiscal 2020, NVIDIA announced that Microsoft’s (MSFT - Free Report) Minecraft game will feature the technology. In addition, the recently-released GeForce RTX SUPER GPUs are expected to have fortified its leadership in the high end of the market.
Additionally, the pandemic-induced work-from-home wave is likely to have bolstered sales of graphic chips utilized in desktops and laptops, which, in turn, is anticipated to have aided the quarterly performance.
Nonetheless, disruptions in retail channel sales due to the global lockdown might have partially offset the benefit of strong demand for the remote working and online learning hardware infrastructure.
Moreover, the pandemic might have adversely impacted the company’s automotive segment during the quarter under review. Notably, travel restrictions as well as economic and business uncertainties have hit global vehicle sales hard.
What Our Model Says
Our proven model does not predict an earnings beat for NVIDIA this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
NVIDIA currently carries a Zacks Rank of 3 and has an Earnings ESP of -6.89%.
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:
Agilent Technologies (A - Free Report) has an Earnings ESP of +5.00% and carries a Zacks Rank of 2, at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Autodesk has an Earnings ESP of +4.44% and carries a Zacks Rank of 3, currently.
Fabrinet (FN - Free Report) has an Earnings ESP of +3.75% and currently carries a Zacks Rank of 3.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>