Nvidia (NASDAQ: NVDA) Poised for Continued Earnings Beats, Jefferies Analysts Say
In a recent note, Jefferies analysts expressed confidence in Nvidia's ability to deliver earnings beats in the upcoming quarters, albeit on a smaller scale. The investment bank highlighted strong demand for Nvidia's Hopper, with inventories and ongoing production supporting the transition to the upcoming Blackwell platform.
Gigabyte's expectation of no slowdown in Hopper orders further reinforces the positive outlook, with demand outpacing supply and rush orders continuing. While anticipated increases in average selling prices may take time, robust volumes are expected to make targets achievable.
Analysts anticipate another strong earnings beat in July, with strong guidance leading into October, projecting beats of about $1 billion for both results and guidance. Early volumes for Blackwell are expected in Q4, with a larger ramp-up in the second half of the year.
Despite recent reports of potential delays for Nvidia's Blackwell chips due to design flaws, analysts believe that the impact on the chipmaker's competitive position and outlook for 2025 is unlikely to be significant. However, there is ongoing debate about the content Nvidia will deliver in the GB200 NVL, with some still viewing these as rack-level sales.
While Jefferies analysts remain confident in their above-consensus estimates for July and October, they acknowledge a decrease in the cushion they previously expected. Nvidia's estimates are currently influenced by the short-term impact of Blackwell delays on revenue expectations and the longer-term shift in focus from NVL volumes to the mix of DGX vs. MGX configurations.
In summary, Nvidia is expected to continue outperforming earnings expectations in the near term, with strong demand for its products driving growth. While potential delays in Blackwell chips are a concern, the overall outlook for the company remains positive, with analysts confident in Nvidia's ability to deliver strong results in the coming quarters.