Nvidia Q3 24 Earnings in Focus
Q3 24 earnings for Nvidia (Nasdaq; ticker: NVDA) – a leader in the artificial intelligence (AI) chip and data centre solutions market – and the company’s Q4 forward guidance will be released after the market closes today. Over the past two years, Nvidia's performance has been nothing short of remarkable, resulting in substantial growth in both share price and company revenue.
The Q2 24 earnings announcement revealed that data centre growth jumped to US$26.3 billion, rising 16% from Q1 24 and was up more than 150% compared to a year ago (Q2 23). This also helped fuel record quarterly revenue, rising 122% (US$30.0 billion) from a year ago (Q2 23). The company’s bottom line – net income – doubled to nearly US$17 billion in Q2 24, compared to a little over 6US$ billion a year ago (Q2 23).
Earnings for Nvidia are set to be reported for the fiscal quarter ending on October 31 of this year. This event is highly anticipated on Wall Street, with significant expectations from investors. According to analysts at Bank of America (BofA), the results could influence the short-term direction of the US stock market. Notably, Nvidia has contributed to approximately 20% of the returns in the S&P 500 over the past year. Therefore, today’s earnings release will likely impact stock market indexes, with implied options suggesting a potential 10% swing in the company’s share price following the earnings announcement.
Earnings will take centre stage, and the company's forward guidance will also be significant. Investors will be particularly focused on margin and market share levels to see if they remain stable as the company works to get Blackwell operational. This also comes after Nvidia recently surpassed Apple (Nasdaq: AAPL) to become the largest company in the world by market capitalisation, now valued at US3.6 trillion.
Other key metrics to keep an eye on:
• Net income: US$17.4 billion expected versus US$9.2 billion a year earlier
• Revenue: US$33.1 billion expected versus US$30.0 billion in Q2 24
• Earnings Per Share (EPS): US$0.75 per share expected versus US$0.38 a year earlier
Analysts Favour Buying
The company’s growth and strong performance are expected to have continued in Q3 24. According to data provided by Refinitiv, 90% of the analysts polled currently rated the stock as a ‘Buy’ (33% of which rated it as a ‘Strong Buy’). Around 10% of the analysts suggested a ‘Hold’.
Year to date, the NVDA stock is up nearly 200%, with the company’s share price rallying 20% since pencilling in a low of US$90.69 at the end of August. Over the previous five years, the stock has also rallied an eye-watering 2,600%.
What Are the Charts Saying?
It would be an understatement to say that the stock is trending higher. The higher highs and higher lows seen on the weekly chart are a textbook definition of an uptrend. At the tail end of September, the stock ruptured the upper boundary of a pennant pattern (drawn from the high of US$140.76 and US$90.69) and has since pushed higher. Generally, once a chart pattern completes – pencils in a breakout – traders will look to apply the pattern’s take-profit objective, which in this case, can be found by extending the pole’s value from the breakout point. As you can imagine, this would involve a profit objective at around US$450.00.
Over on the daily chart, the stock has been caught within an ascending channel since the middle of October, extended from US$128.74 and US$144.42. You will also note that the stock left the lower boundary of its ascending channel unchallenged this week and rallied nearly 5.0% yesterday. Technically, this indicates strength and a breakout above the upper boundary of the ascending channel to potentially refresh all-time highs.
Written by FP Markets market analyst Aaron Hill.
The Q2 24 earnings announcement revealed that data centre growth jumped to US$26.3 billion, rising 16% from Q1 24 and was up more than 150% compared to a year ago (Q2 23). This also helped fuel record quarterly revenue, rising 122% (US$30.0 billion) from a year ago (Q2 23). The company’s bottom line – net income – doubled to nearly US$17 billion in Q2 24, compared to a little over 6US$ billion a year ago (Q2 23).
Earnings for Nvidia are set to be reported for the fiscal quarter ending on October 31 of this year. This event is highly anticipated on Wall Street, with significant expectations from investors. According to analysts at Bank of America (BofA), the results could influence the short-term direction of the US stock market. Notably, Nvidia has contributed to approximately 20% of the returns in the S&P 500 over the past year. Therefore, today’s earnings release will likely impact stock market indexes, with implied options suggesting a potential 10% swing in the company’s share price following the earnings announcement.
Earnings will take centre stage, and the company's forward guidance will also be significant. Investors will be particularly focused on margin and market share levels to see if they remain stable as the company works to get Blackwell operational. This also comes after Nvidia recently surpassed Apple (Nasdaq: AAPL) to become the largest company in the world by market capitalisation, now valued at US3.6 trillion.
Other key metrics to keep an eye on:
• Net income: US$17.4 billion expected versus US$9.2 billion a year earlier
• Revenue: US$33.1 billion expected versus US$30.0 billion in Q2 24
• Earnings Per Share (EPS): US$0.75 per share expected versus US$0.38 a year earlier
Analysts Favour Buying
The company’s growth and strong performance are expected to have continued in Q3 24. According to data provided by Refinitiv, 90% of the analysts polled currently rated the stock as a ‘Buy’ (33% of which rated it as a ‘Strong Buy’). Around 10% of the analysts suggested a ‘Hold’.
Year to date, the NVDA stock is up nearly 200%, with the company’s share price rallying 20% since pencilling in a low of US$90.69 at the end of August. Over the previous five years, the stock has also rallied an eye-watering 2,600%.
What Are the Charts Saying?
It would be an understatement to say that the stock is trending higher. The higher highs and higher lows seen on the weekly chart are a textbook definition of an uptrend. At the tail end of September, the stock ruptured the upper boundary of a pennant pattern (drawn from the high of US$140.76 and US$90.69) and has since pushed higher. Generally, once a chart pattern completes – pencils in a breakout – traders will look to apply the pattern’s take-profit objective, which in this case, can be found by extending the pole’s value from the breakout point. As you can imagine, this would involve a profit objective at around US$450.00.
Over on the daily chart, the stock has been caught within an ascending channel since the middle of October, extended from US$128.74 and US$144.42. You will also note that the stock left the lower boundary of its ascending channel unchallenged this week and rallied nearly 5.0% yesterday. Technically, this indicates strength and a breakout above the upper boundary of the ascending channel to potentially refresh all-time highs.
Written by FP Markets market analyst Aaron Hill.
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