Here's what Nvidia earnings need to show to be 'good enough' for Wall Street

By Emily Bary

Analysts are modeling $24.5 billion in revenue for last quarter, but UBS sees prospect that Nvidia will post $26 billion

Nvidia Corp. reports earnings next Wednesday, and Wall Street expects the company to report $24.5 billion in quarterly revenue - which would be up an astounding 240% from a year before.

But UBS analyst Timothy Arcuri sees room for that total to be even bigger. He wrote Tuesday that Nvidia (NVDA) could deliver April-quarter revenue "potentially as high as $26 billion" and offer an outlook for this quarter that's possibly in the $27 billion to $28 billion range. (Analysts tracked by FactSet expect $26.5 billion in revenue for the ongoing quarter.)

Those two numbers would be "good enough to keep the stock biased higher, in our view," Arcuri wrote.

Nvidia shares are up 3.7% late in Wednesday's session.

Read: Nvidia CEO Jensen Huang saw his pay jump 60% last year, topping what rivals made

Still, there are plenty of questions around the stock, namely whether Nvidia is set up to see an "air pocket" later this year, stemming from the timing for when its new Blackwell chip lineup will start to head out to customers.

"While this probably doesn't get answered/addressed on this earnings call, we think these concerns are generally overblown following recent customer discussions and supply-chain work suggesting Hopper remains sold out at least through the end of this year," Arcuri wrote. Hopper is the company's current chip lineup.

Arcuri also glimpses a compelling picture down the road once Nvidia commences shipments of the Blackwell line. He sees "very strong GB200 demand," referring to the Grace Blackwell product.

See also: Dell's stock is having a milestone day. Here's why Morgan Stanley is so bullish.

Arcuri late last month boosted his calendar 2025 revenue forecast for Nvidia to about $175 billion from $147 billion previously, writing at the time that "supply-chain work suggests this may still be too low, so even these new numbers leave a fair amount of slack/headroom for upside."

And in Tuesday's report, he suggested Wall Street in general may be underestimating the company's financial potential: "While most of the sell side still appears way behind the curve on [calendar 2025], we believe most investors are in the high-$30s [earnings per share] - still below where we are post this round of checks."

Arcuri has a buy rating and $1,150 target price on Nvidia's stock.

-Emily Bary

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05-15-24 1544ET

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