Nvidia (NASDAQ: NVDA) Earnings Preview: AI Adoption and Market Opportunities
Nvidia is set to release its earnings report this week, with analysts expecting an above-consensus performance. However, the focus will be on guidance as investors remain cautious about AI adoption, according to Evercore ISI strategists.
Currently, only 5% of U.S. businesses are utilizing AI, but as AI continues to expand its reach across various sectors, market downturns are seen as opportunities for investors. Signs of AI making advancements in traditionally difficult-to-automate industries, such as retail, are emerging, with companies like Walmart using GenAI to improve productivity.
Evercore's Strategy team has identified a list of "AI Revolutionaries," including companies like Nvidia, Coca-Cola, and State Street, that are showing increased AI mentions, improving EPS, and offering attractive valuations. Small-cap stocks and companies with significant buyback exposure are also on the list.
Nvidia is expected to report its second-quarter earnings for fiscal 2025 after the market closes on Wednesday. Wall Street analysts anticipate revenue to double to $28.84 billion, with net income also expected to more than double to $14.95 billion.
Earlier reports of delays in Nvidia's Blackwell chip caused a dip in the company's shares, but Nvidia has assured that production will ramp up in the second half of the year as planned. Some analysts believe the impact on customers may be minimal, with potential for increased demand for existing chips.
In conclusion, Nvidia's earnings report will give insights into the company's performance and the state of the semiconductor industry. Investors should pay attention to guidance on AI adoption and market opportunities, as well as any updates on the Blackwell chip production. This information can help investors make informed decisions about their investments in Nvidia and the broader market.