With its stock down over 30% from its October peak, Nvidia (NASDAQ:NVDA) has a lot to prove when it reports earnings on Nov. 17.
The chip designer is, of course, no stranger to big expectations. Indeed, for 14 consecutive quarters, its revenue has beaten even the upper end of management’s forecast. Last quarter alone, Nvidia generated about $96 billion in sales, more than double the year before and more than $3 billion above the high end of its forecast.
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This earnings report feels different, though. And not only because Jensen Huang won’t be leading the call. Even before his resignation on Nov. 11, several questions hung over the chip designer’s future, chief among them whether its customers would continue spending heavily on AI data centers.
This earnings call is, therefore, significant in more than one way. There will be plenty for investors to digest. Here’s what I’ll be watching.
Image source: Nvidia.
More growth, and then some: Can Nvidia keep it up?
Nvidia, for starters, is best known for designing chips — graphics processing units (GPUs), to be specific.
Since their early days in gaming, Nvidia’s GPUs have proven adept at handling many computing tasks simultaneously, making them particularly well-suited to training and running AI models. Its AI chips are so widely used that whenever you ask an AI chatbot a question today, there’s a good chance Nvidia’s technology is helping generate the answer.
That dominant role means Nvidia has been growing like a weed; indeed, sales and profits have shot up dramatically. The question now is how long that growth can continue.
Very likely, growth will continue this quarter. Nvidia previously forecasted about $108 billion in revenue for the quarter it’s about to report, plus or minus 2%. Many analysts, however, expect sales to approach $109 billion — roughly 91% more than a year earlier — and adjusted earnings of $2.47 per share.
NVDA Revenue (Quarterly) data by YCharts
Impressive as that sounds (and let’s not be jaded: it is very impressive), I’m more interested in what Nvidia forecasts for the fourth quarter and beyond.
Back in August, management projected revenue growth of about 70% in fiscal 2028, and investors will want to know whether that outlook still holds. At that time, CFO Kress said supply constraints were holding back further growth (Nvidia simply couldn’t deliver enough hardware to meet customer demand). Any update on those constraints could reveal whether there’s still room for faster growth.
