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NVIDIA Likely to Beat Q1 Earnings Estimates: Time to Buy the Stock?
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Key Takeaways
NVIDIA expects Q1 revenues of $78 billion, and the consensus sees 78.7% growth from the year-ago period.
Data Center, Professional Visualization and Automotive are projected to post strong gains.
Robust demand for chips required for the development of generative AI models to boost NVDA's Q1 performance.
NVIDIA Corporation (NVDA - Free Report) is likely to surpass earnings estimates when it reports first-quarter fiscal 2027 results on May 20, after market close.
The company expects revenues of $78 billion (+/-2%) for the quarter. The Zacks Consensus Estimate is pegged at $78.75 billion, which indicates a whopping 78.7% increase from the year-ago reported figure.
The Zacks Consensus Estimate for quarterly earnings has been revised a penny upward over the past 30 days to $1.77. This suggests growth of 118.5% from the year-ago quarter’s earnings of 81 cents per share.
Image Source: Zacks Investment Research
Earnings of the graphics chip maker surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed in one, delivering an average surprise of 2.93%.
NVIDIA Corporation Price, Consensus and EPS Surprise
Our proven model predicts an earnings beat for NVIDIA this time. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which increases the chances of an earnings beat.
Earnings ESP: NVIDIA has an Earnings ESP of +0.24% at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
NVIDIA’s first-quarter top line is likely to have benefited from the continued strength in its Data Center business. The increasing adoption of cloud-based solutions amid the growing hybrid working trend is anticipated to have boosted demand for its chips across the Data Center end market. An increase in hyperscale demand and growing adoption in the inference market are likely to have acted as tailwinds in the to-be-reported quarter.
The Data Center end-market business should have benefited from the growing demand for generative AI and large language models using GPUs based on NVIDIA Blackwell architectures. The strong demand for its chips from large cloud service and consumer Internet companies is anticipated to have aided the segment’s top-line growth in the to-be-reported quarter. The Zacks Consensus Estimate for the Data Center end market’s first-quarter revenues is pegged at $73.15 billion.
NVIDIA’s first-quarter performance is also likely to have benefited from the continued momentum across its Gaming and Professional Visualization end markets. The Gaming end market’s results have improved year over year in nine of the last 11 quarters, as inventory levels with channel partners have returned to normal. The company also registered strong demand across most regions for its gaming products. The consensus mark for the Gaming end market’s first-quarter revenues is pegged at $3.33 billion.
NVIDIA’s Professional Visualization segment’s performance also reflected recovery, with revenues increasing for 10 consecutive quarters. The trend is likely to have continued in the first quarter. The Zacks Consensus Estimate for the Professional Visualization end market’s first-quarter revenues is pegged at $1.05 billion.
The company’s Automotive segment demonstrated an improvement in trends over the preceding eight quarters. The positive trend is likely to have continued in the first quarter due to increasing investments in self-driving and AI cockpit solutions. The consensus mark for the Automotive end market’s first-quarter revenues is pegged at $655.33 million.
NVIDIA Stock Price Performance & Valuation
Shares of NVIDIA have remained highly volatile over the past year. The stock has gained 74.6% over the past year, underperforming the Zacks Semiconductor – General industry’s rise of 76.4%. The stock has also underperformed major semiconductor stocks, including Intel Corporation (INTC - Free Report) , Advanced Micro Devices, Inc. (AMD - Free Report) and Broadcom Inc. (AVGO - Free Report) . Shares of Intel, Advanced Micro Devices and Broadcom have surged 433.1%, 289.2% and 89.2%, respectively.
NVIDIA One-Year Price Return Performance
Image Source: Zacks Investment Research
Now, let’s look at the value NVIDIA offers investors at the current levels. NVIDIA is trading at a discount with a forward 12-month price-to-earnings (P/E) of 26.63X compared with the industry’s 29.16X, reflecting an attractive valuation.
Forward 12-Month P/E Multiple
Image Source: Zacks Investment Research
Compared with other chip giants, NVDA trades at a lower multiple against Intel, Advanced Micro Devices and Broadcom. Currently, Intel, Advanced Micro Devices and Broadcom trade at a forward P/E of 98.56X, 53.15X and 29.62X, respectively.
Investment Consideration for NVIDIA
Over the past couple of years, NVIDIA’s revenue growth has been driven by robust demand for chips required for the development of generative AI models. NVIDIA dominates the market for generative AI chips, which have already proven useful across multiple industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy & utilities and video game development.
The growing demand to modernize the workflow across industries is expected to drive the demand for generative AI applications. The global generative AI market size is anticipated to reach $1,260.15 billion by 2034, according to a new report by Fortune Business Insights. The market is expected to witness a CAGR of 29.3% from 2026 to 2034.
The complexity of generative AI requires vast knowledge and immense computational power. This means that enterprises will need to significantly upgrade their network infrastructures. NVIDIA’s AI chips, including the A100, H100, B100, B200, B300, GB200 and GB300, are the top choices for building and running these powerful AI applications, positioning the company as a leader in this space. As the generative AI revolution unfolds, we expect NVIDIA's advanced chips to drive substantial growth in its revenues and market presence.
Final Thoughts: Buy NVDA Stock Now
As a leading player in the semiconductor industry, NVIDIA has benefited from its dominance in GPUs and strategic expansion into AI, data centers and autonomous vehicles. The company's strong product portfolio, leadership in AI and relentless innovation present a compelling investment opportunity. A lower valuation multiple than the industry also suggests that NVIDIA is a good investment option right now.
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NVIDIA Likely to Beat Q1 Earnings Estimates: Time to Buy the Stock?
Key Takeaways
NVIDIA Corporation (NVDA - Free Report) is likely to surpass earnings estimates when it reports first-quarter fiscal 2027 results on May 20, after market close.
The company expects revenues of $78 billion (+/-2%) for the quarter. The Zacks Consensus Estimate is pegged at $78.75 billion, which indicates a whopping 78.7% increase from the year-ago reported figure.
The Zacks Consensus Estimate for quarterly earnings has been revised a penny upward over the past 30 days to $1.77. This suggests growth of 118.5% from the year-ago quarter’s earnings of 81 cents per share.
Image Source: Zacks Investment Research
Earnings of the graphics chip maker surpassed the Zacks Consensus Estimate in three of the trailing four quarters and missed in one, delivering an average surprise of 2.93%.
NVIDIA Corporation Price, Consensus and EPS Surprise
NVIDIA Corporation price-consensus-eps-surprise-chart | NVIDIA Corporation Quote
What the Zacks Model Unveils for NVDA
Our proven model predicts an earnings beat for NVIDIA this time. This is because the stock has the right combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), which increases the chances of an earnings beat.
Earnings ESP: NVIDIA has an Earnings ESP of +0.24% at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: NVIDIA currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Likely to Influence NVIDIA’s Q1 Results
NVIDIA’s first-quarter top line is likely to have benefited from the continued strength in its Data Center business. The increasing adoption of cloud-based solutions amid the growing hybrid working trend is anticipated to have boosted demand for its chips across the Data Center end market. An increase in hyperscale demand and growing adoption in the inference market are likely to have acted as tailwinds in the to-be-reported quarter.
The Data Center end-market business should have benefited from the growing demand for generative AI and large language models using GPUs based on NVIDIA Blackwell architectures. The strong demand for its chips from large cloud service and consumer Internet companies is anticipated to have aided the segment’s top-line growth in the to-be-reported quarter. The Zacks Consensus Estimate for the Data Center end market’s first-quarter revenues is pegged at $73.15 billion.
NVIDIA’s first-quarter performance is also likely to have benefited from the continued momentum across its Gaming and Professional Visualization end markets. The Gaming end market’s results have improved year over year in nine of the last 11 quarters, as inventory levels with channel partners have returned to normal. The company also registered strong demand across most regions for its gaming products. The consensus mark for the Gaming end market’s first-quarter revenues is pegged at $3.33 billion.
NVIDIA’s Professional Visualization segment’s performance also reflected recovery, with revenues increasing for 10 consecutive quarters. The trend is likely to have continued in the first quarter. The Zacks Consensus Estimate for the Professional Visualization end market’s first-quarter revenues is pegged at $1.05 billion.
The company’s Automotive segment demonstrated an improvement in trends over the preceding eight quarters. The positive trend is likely to have continued in the first quarter due to increasing investments in self-driving and AI cockpit solutions. The consensus mark for the Automotive end market’s first-quarter revenues is pegged at $655.33 million.
NVIDIA Stock Price Performance & Valuation
Shares of NVIDIA have remained highly volatile over the past year. The stock has gained 74.6% over the past year, underperforming the Zacks Semiconductor – General industry’s rise of 76.4%. The stock has also underperformed major semiconductor stocks, including Intel Corporation (INTC - Free Report) , Advanced Micro Devices, Inc. (AMD - Free Report) and Broadcom Inc. (AVGO - Free Report) . Shares of Intel, Advanced Micro Devices and Broadcom have surged 433.1%, 289.2% and 89.2%, respectively.
NVIDIA One-Year Price Return Performance
Image Source: Zacks Investment Research
Now, let’s look at the value NVIDIA offers investors at the current levels. NVIDIA is trading at a discount with a forward 12-month price-to-earnings (P/E) of 26.63X compared with the industry’s 29.16X, reflecting an attractive valuation.
Forward 12-Month P/E Multiple
Image Source: Zacks Investment Research
Compared with other chip giants, NVDA trades at a lower multiple against Intel, Advanced Micro Devices and Broadcom. Currently, Intel, Advanced Micro Devices and Broadcom trade at a forward P/E of 98.56X, 53.15X and 29.62X, respectively.
Investment Consideration for NVIDIA
Over the past couple of years, NVIDIA’s revenue growth has been driven by robust demand for chips required for the development of generative AI models. NVIDIA dominates the market for generative AI chips, which have already proven useful across multiple industries, including marketing, advertising, customer service, education, content creation, healthcare, automotive, energy & utilities and video game development.
The growing demand to modernize the workflow across industries is expected to drive the demand for generative AI applications. The global generative AI market size is anticipated to reach $1,260.15 billion by 2034, according to a new report by Fortune Business Insights. The market is expected to witness a CAGR of 29.3% from 2026 to 2034.
The complexity of generative AI requires vast knowledge and immense computational power. This means that enterprises will need to significantly upgrade their network infrastructures. NVIDIA’s AI chips, including the A100, H100, B100, B200, B300, GB200 and GB300, are the top choices for building and running these powerful AI applications, positioning the company as a leader in this space. As the generative AI revolution unfolds, we expect NVIDIA's advanced chips to drive substantial growth in its revenues and market presence.
Final Thoughts: Buy NVDA Stock Now
As a leading player in the semiconductor industry, NVIDIA has benefited from its dominance in GPUs and strategic expansion into AI, data centers and autonomous vehicles. The company's strong product portfolio, leadership in AI and relentless innovation present a compelling investment opportunity. A lower valuation multiple than the industry also suggests that NVIDIA is a good investment option right now.