Nvidia’s profits are high. Here’s what Wall Street is watching
Expectations are high for Nvidia’s earnings. Nvidia is expected to report fiscal 2025 third-quarter results on Wednesday after the close. Analysts see the beloved chip maker posting a profit of 75 cents per share on revenue of $33.16 billion, per LSEG. Both figures represent growth of more than 80% from the year-ago period. The report is likely to have an impact on the broader market, given Nvidia’s size. The semiconductor giant has a market capitalization of more than $3.6 trillion, making it the most valuable company listed in the US. But as important as the results themselves will be what Nvidia says about the need for its latest Blackwell graphics processing unit, or GPU, which is designed to meet the heavy processing needs of artificial intelligence capabilities and is often sold to large tech hyperscalers. NVDA YTD performance on Nvidia mountain this year. The impetus behind Nvidia’s Blackwell ramp Wall Street majors view Nvidia’s Blackwell platform – which should be generally available in the January quarter – as a multibillion-dollar revenue opportunity for the chip maker. Nvidia said in August that it expects “a few billion” in Blackwell sales in the January quarter. According to Piper Sandler analyst Harsh Kumar, Nvidia could bring in between $5 billion and $8 billion of Blackwell’s revenue in the January quarter. “We make NVDA our top pick given the company’s leading position in AI accelerators and the upcoming launch of the Blackwell architecture,” Kumar said in a Nov. 11, putting a price of $175 on the stock. “We think demand for the H100 and 200 will continue to be spread between cloud/enterprise and sovereign, but Blackwell’s initial allocation in the January-April quarter will likely be met by the supply of hyperscalers.” Goldman Sachs and Citi are working in the same way on the sale of Nvidia’s Blackwell, but their analysts believe that the successful transition of Blackwell chips will be more visible in the first quarter of next year. Goldman maintained its price target of $150, while Citi raised its price target by $20 to $170. Both stores have a buy rating in stock. “While we expect FY1Q (April) to be a true ‘burst’ quarter where Blackwell’s ramp-up coupled with improved Supply-side conditions drive meaningful EPS revisions, we expect FY3Q (Oct), FY4Q (Jan ) and guidance. Management’s comments on the earnings call support our positive view on the stock,” Goldman analyst Toshiya Hari said in a Nov. 5 to customers. “We believe the stock is well positioned to continue its strong performance.” Analysts are also not too bothered by the latest concerns regarding a recent report from The Information that Nvidia’s Blackwell NVL-72 server racks are experiencing problems with overheating. Bank of America analyst Vivek Arya wrote on Sunday that the company is poised for a “strong” 2025 despite concerns over hot issues and expects a decline in the AI rating. He maintained his $190 price target on the shares, which is one of the Street’s bullish predictions — suggesting a nearly 30% upside as of Tuesday’s close. “We believe both of these issues are significant but unlikely to derail NVDA’s CY25 momentum as all cloud customers need to deploy AI capacity (Hopper and/or Blackwell) to meet growing demand,” he said. “Concerns about AI’s rate of decline are also premature in our view as the industry is still in its infancy.” Citi analyst Atif Malik similarly mimicked the quarter’s big beat and rose from the April quarter, expecting Nvidia’s overall score to improve on Blackwell’s turnaround. HSBC said concerns over the Blackwell Supplies chain had “calmed down” and expected the company’s data center prices to rise by 2026, assuming the market had not yet fully priced. What about the quarter as a whole? Many analysts expect strong results from the chip maker, thanks in part to strong sales of its Hopper GPU. Goldman’s Hari sees revenue rise 90% year over year to more than $34 billion, while earnings of 79 cents per share also beat expectations. “We expect strong demand for Nvidia’s Hopper-based GPUs (ie H100 and especially H200) and Spectrum-X (ie Ethernet-based Networking product) to drive double-digit Data Center revenue growth (%),” Hari wrote. Wells Fargo’s Aaron Rakers sees earnings coming in at 73 cents per share, slightly below the LSEG estimate. That said, he maintained his overweight rating on the stock earlier this month, citing “expanding AI opportunities” around autonomous driving, healthcare and robotics. He also pointed to what he believes could be a multibillion-dollar opportunity for Nvidia: its work with Elon Musk’s artificial intelligence startup xAI. Nvidia announced last month that its Spectrum-X Ethernet network enabled the system behind XAI’s Colossus supercomputer used to train Grok’s xAI family of large language models. Colossus contains 100,000 Nvidia Hopper GPUs, and xAI is on a mission to repeat that, with Nvidia’s Oct. 28. Stifel analyst Ruben Roy, who has a buy rating on the stock, said Monday he expects earnings per share of 75 cents for the company, in line with consensus. “A broad set of industry comments, consistent with our checks, suggest consistent setups relative to previous locations,” Roy said in the letter. “For fiscal 4Q, we expect, once again, revenue guidance above the current consensus estimate.” Correction: Bank of America analyst Vivek Arya maintained his $190 price target on shares suggesting a potential 30% upside as of late Tuesday. The previous version did not specify the percentage correctly. The supercomputer xAI has is called Colossus. The previous version misspelled its name.
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