NVIDIA Earnings Report Upcoming, Wall Street Focusing on AI Market Trends

BlockBeats News, August 27th: After the U.S. stock market closed today, NVIDIA will release its second-quarter financial report. The market is closely watching its developments in the U.S.-China AI competition, chip supply-demand relationship, and the involvement of hyperscale customers. The financial report will also affect the overall stock market and the trend of the underlying artificial intelligence market. According to market data, NVIDIA is currently up 0.03% intraday, and NVIDIA concept stock CoreWeave is active, currently up nearly 5%.

Investors have generally believed that the performance will exceed expectations before the financial report is released. According to FactSet data, NVIDIA is expected to announce $46.05 billion in revenue for the second quarter, higher than the $45 billion guidance given in the previous quarter, with an expected EPS of $0.95 and a net profit of $23.4 billion. Data center revenue is expected to reach $41.34 billion, a 57% year-on-year increase. Although this is a strong growth rate, it is lower than the 73% growth rate announced by NVIDIA in the last earnings report.

Piper Sandler analyst Harsh Kumar stated that NVIDIA's guidance on its China business will be the core of Wednesday's financial report. NVIDIA's chips are at the center of the technological arms race. Trump announced that the U.S. will extract a 15% share from NVIDIA's chip sales in China, while Chinese domestic companies are trying to avoid using NVIDIA's H20 chips. There are reports that NVIDIA has suspended the production of H20 chips. As China strives to strengthen its domestic chip industry, NVIDIA's ability to generate revenue from the Chinese market will be a key indicator of how much technological advantage the U.S. holds.

Furthermore, hyperscale customers—companies building AI infrastructure—have been continuously raising their capital expenditure expectations and purchasing a large number of NVIDIA GPUs. These companies with multi-billion-dollar budgets are undoubtedly a positive for NVIDIA, but the sell-off in the stock market led by tech giants last week has raised concerns among some investors about the sustainability of this large-scale investment. In NVIDIA's first-quarter financial report, 30% of the revenue came from just two customers, showing a high level of customer concentration. Nevertheless, analysts remain optimistic about hyperscale customer spending, believing that hyperscale customers are sprinting towards Artificial General Intelligence (AGI) and have a clear spending plan in place. This level of investment can at least last for several more years.