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Strong Chip Demand From Datacenter to Aid NVIDIA (NVDA) Q2 Earnings
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NVIDIA Corporation (NVDA - Free Report) is gearing up to announce second-quarter fiscal 2025 earnings on Aug 28, and all indications point to impressive results, thanks to huge demand for its chip from the datacenter end market. The company’s dominance in the realm of generative artificial intelligence (AI) and large language models has positioned it as a critical player, and this is likely to be reflected in its upcoming quarterly report.
Click here to know how NVDA’s overall fiscal second-quarter results are likely to be.
Datacenter Segment: A Key Growth Driver
NVIDIA’s datacenter segment has been a powerhouse, and the trend is expected to have continued in the second quarter. The driving force behind this growth is the increasing demand for generative AI and large language models, which heavily rely on NVIDIA’s cutting-edge Hopper and Ampere architecture GPUs.
In the first quarter of fiscal 2024, NVIDIA’s datacenter revenues hit unprecedented levels, soaring 427% year over year and 23% sequentially to $22.6 billion. This surge was largely fueled by significant investments in generative AI as companies across various industries scrambled to improve their computational capabilities.
Analysts anticipate this momentum to have persisted in the second quarter. Per our model estimate, datacenter revenues could climb to $24.5 billion, marking an impressive 137% year-over-year growth and a 33% sequential increase. Such figures underscore the critical role NVIDIA plays in the evolving landscape of AI and datacenter technologies.
The rise of generative AI, particularly following the advent of OpenAI’s ChatGPT, has been nothing short of a transformation. Generative AI, supported by large language models, is revolutionizing industries by automating and enhancing content creation, from text and images to audio and synthetic data. This technological leap is modernizing workflows in sectors as diverse as marketing, customer service and healthcare.
According to a report by Fortune Business Insights, the global generative AI market is expected to reach $967.6 billion by 2032, at a compound annual growth rate (CAGR) of 39.6% during 2024-2032. The widespread adoption of generative AI by enterprises has underscored its value and the need for significant computational power. This is where NVIDIA’s next-generation chips come into play.
NVIDIA’s GPUs are the backbone of AI models used across a variety of industries, including automotive, healthcare and manufacturing. As the demand for high-performance computing continues to rise, NVIDIA is well-positioned to capitalize on this trend. The company’s advanced chips, known for their unparalleled computing power, are indispensable for enterprises looking to upgrade their infrastructure to meet the demands of AI.
Given the surging demand for AI-driven technologies, NVIDIA is expected to report strong revenue growth in its upcoming earnings release. The company expects second-quarter fiscal 2024 revenues to reach $28 billion, largely driven by the increasing investments in AI within the datacenter market.
This anticipated growth reflects not only the strength of NVIDIA’s product offerings but also the broader shift toward AI and advanced computational models across industries. As businesses continue to integrate AI into their operations, NVIDIA’s GPUs are becoming increasingly essential, driving demand and, consequently, revenue growth.
The Zacks Consensus Estimate for PayPal’s 2024 earnings has been revised 19 cents upward to $4.42 per share in the past 30 days, which suggests a year-over-year decline of 13.3%. The company has an estimated long-term earnings growth rate of 15.9%.
The Zacks Consensus Estimate for AudioEye’s 2024 earnings has been revised upward by 10 cents to 47 cents per share in the past 30 days, which calls for an increase of 327.3% on a year-over-year basis. The company has an estimated long-term earnings growth rate of 25%.
The consensus mark for Aspen Technology’s fiscal 2025 earnings has been revised upward by 10.4% to $7.43 per share over the past 30 days, which indicates a 13.8% decrease from that reported in 2023. It has a long-term earnings growth expectation of 13.1%.
Image: Bigstock
Strong Chip Demand From Datacenter to Aid NVIDIA (NVDA) Q2 Earnings
NVIDIA Corporation (NVDA - Free Report) is gearing up to announce second-quarter fiscal 2025 earnings on Aug 28, and all indications point to impressive results, thanks to huge demand for its chip from the datacenter end market. The company’s dominance in the realm of generative artificial intelligence (AI) and large language models has positioned it as a critical player, and this is likely to be reflected in its upcoming quarterly report.
Click here to know how NVDA’s overall fiscal second-quarter results are likely to be.
Datacenter Segment: A Key Growth Driver
NVIDIA’s datacenter segment has been a powerhouse, and the trend is expected to have continued in the second quarter. The driving force behind this growth is the increasing demand for generative AI and large language models, which heavily rely on NVIDIA’s cutting-edge Hopper and Ampere architecture GPUs.
In the first quarter of fiscal 2024, NVIDIA’s datacenter revenues hit unprecedented levels, soaring 427% year over year and 23% sequentially to $22.6 billion. This surge was largely fueled by significant investments in generative AI as companies across various industries scrambled to improve their computational capabilities.
Analysts anticipate this momentum to have persisted in the second quarter. Per our model estimate, datacenter revenues could climb to $24.5 billion, marking an impressive 137% year-over-year growth and a 33% sequential increase. Such figures underscore the critical role NVIDIA plays in the evolving landscape of AI and datacenter technologies.
NVIDIA Corporation Price and EPS Surprise
NVIDIA Corporation price-eps-surprise | NVIDIA Corporation Quote
Generative AI: A Catalyst for Revenue Growth
The rise of generative AI, particularly following the advent of OpenAI’s ChatGPT, has been nothing short of a transformation. Generative AI, supported by large language models, is revolutionizing industries by automating and enhancing content creation, from text and images to audio and synthetic data. This technological leap is modernizing workflows in sectors as diverse as marketing, customer service and healthcare.
According to a report by Fortune Business Insights, the global generative AI market is expected to reach $967.6 billion by 2032, at a compound annual growth rate (CAGR) of 39.6% during 2024-2032. The widespread adoption of generative AI by enterprises has underscored its value and the need for significant computational power. This is where NVIDIA’s next-generation chips come into play.
NVIDIA’s GPUs are the backbone of AI models used across a variety of industries, including automotive, healthcare and manufacturing. As the demand for high-performance computing continues to rise, NVIDIA is well-positioned to capitalize on this trend. The company’s advanced chips, known for their unparalleled computing power, are indispensable for enterprises looking to upgrade their infrastructure to meet the demands of AI.
Given the surging demand for AI-driven technologies, NVIDIA is expected to report strong revenue growth in its upcoming earnings release. The company expects second-quarter fiscal 2024 revenues to reach $28 billion, largely driven by the increasing investments in AI within the datacenter market.
This anticipated growth reflects not only the strength of NVIDIA’s product offerings but also the broader shift toward AI and advanced computational models across industries. As businesses continue to integrate AI into their operations, NVIDIA’s GPUs are becoming increasingly essential, driving demand and, consequently, revenue growth.
Zacks Rank & Stocks to Consider
Currently, NVIDIA carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are PayPal (PYPL - Free Report) , AudioEye (AEYE - Free Report) and Aspen Technology (AZPN - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for PayPal’s 2024 earnings has been revised 19 cents upward to $4.42 per share in the past 30 days, which suggests a year-over-year decline of 13.3%. The company has an estimated long-term earnings growth rate of 15.9%.
The Zacks Consensus Estimate for AudioEye’s 2024 earnings has been revised upward by 10 cents to 47 cents per share in the past 30 days, which calls for an increase of 327.3% on a year-over-year basis. The company has an estimated long-term earnings growth rate of 25%.
The consensus mark for Aspen Technology’s fiscal 2025 earnings has been revised upward by 10.4% to $7.43 per share over the past 30 days, which indicates a 13.8% decrease from that reported in 2023. It has a long-term earnings growth expectation of 13.1%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.