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NVIDIA (NVDA) to Post Q1 Earnings: What's in Store?

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NVIDIA Corporation (NVDA - Free Report) is slated to release first-quarter fiscal 2021 results on May 21.

For the fiscal first quarter, the company expects revenues of $3 billion (+/-2%). The Zacks Consensus Estimate is also pegged at $3 billion, calling for a rise of 34.9% from the year-ago quarter’s reported figure.

The Zacks Consensus Estimate for earnings is pinned at $1.69, suggesting an year-over-year improvement of a whopping 92.1%.

The company’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the positive surprise being 10.6%, on average.

Let’s see how things have shaped up for the announcement.

Factors at Play

NVIDIA’s fiscal first-quarter performance is likely to have benefited from growth across all its business segments except for automotive. The company’s growth opportunities in ray-traced gaming, rendering, high-performance computing and AI are likely to have been driving factors.

NVIDIA’s fiscal first-quarter performance is anticipated to have benefited from strength in its data-center business on the growing adoption of cloud-based solutions amid the coronavirus crisis-induced work-from-home wave. Increase in Hyperscale demand and growing adoption in the inference market are anticipated to have been tailwinds.

Further, a spate of blockbuster AAA titles, which pledged support for the NVIDIA RTX ray tracing technology, is likely to have been a positive. In the fiscal third quarter, NVIDIA announced that Microsoft’s Minecraft game will feature the technology. In addition, the recently-released GeForce RTX SUPER GPUs are expected to have fortified its leadership in the high end of the market.

Additionally, the coronavirus-induced work-from-home wave is likely to have bolstered sales of graphic chips utilized in desktops and laptops, which, in turn, is anticipated to have driven the quarterly performance.

Nonetheless, disruptions in retail channel sales due to the coronavirus-led global lockdown might have partially offset the benefit of strong demand for the work-from-home hardware infrastructure.

Moreover, the company’s automotive segment might have been adversely impacted by the pandemic. Notably, worldwide vehicle sales plunged this April on the global lockdown as well as economic and business uncertainties.

What Our Model Says

Our proven model predicts an earnings beat for NVIDIA this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.

NVIDIA currently carries a Zacks Rank of 2 and has an Earnings ESP of +0.15%.

Some Other Stocks With Favorable Combinations

Here are some other companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

Anaplan, Inc. (PLAN - Free Report) has an Earnings ESP of +3.70% and currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

CrowdStrike Holdings Inc. (CRWD - Free Report) has an Earnings ESP of +3.57% and holds a Zacks Rank of 2 currently.

Baidu Inc. (BIDU - Free Report) has an Earnings ESP of +4.45% and carries a Zacks Rank #3, at present.

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