NVIDIA Earnings Report Drops Thursday: Can the "AI Darling" Turn the Tide Amidst the Panic Storm?

On Thursday morning Beijing time, the world’s “most important earnings report” — NVIDIA’s earnings — is about to be released. Although Wall Street generally expects NVIDIA to deliver strong growth in the fourth quarter of last year and issue optimistic guidance, in the recent storm where “AI ghost stories” triggered a collective plunge in U.S. software stocks, whether this earnings report can turn the tide remains uncertain.

Currently, the U.S. stock market faces multiple external risks, including heightened AI concerns, geopolitical turmoil, and reduced expectations for rate cuts. All these factors cast a fog over the stock price movement following NVIDIA’s earnings announcement.

A solid earnings report is already a given

For NVIDIA, the “AI darling,” delivering excellent earnings has become a routine “basic operation” — analysts point out that the sustained growth in demand for AI infrastructure, increasing shipments of next-generation chips, and ongoing data center spending all indicate a robust performance trend that is undeniable.

Peter Corey, Chief Market Strategist at Pave Finance, said:

“NVIDIA’s upcoming earnings should show strong performance and optimistic outlooks, and recent channel survey results also generally reflect a positive attitude.”

“Although DRAM shortages and power supply bottlenecks may still pose potential obstacles, the demand data we see does not indicate that these constraints are currently having a substantial impact on end-user demand.”

Ruben Roy, an analyst at Stifel, stated that the firm remains optimistic about NVIDIA’s prospects, believing that “NVIDIA is still in the early stages of our expected long-term investment cycle, which is unrelated to the sustainability issues of AI infrastructure spending.”

His outlook for this quarter remains consistent with his view from three months ago. He noted that NVIDIA is still “dealing with a known story of accelerating demand, while also facing long-term concerns about the sustainability of AI infrastructure spending.”

Roy added that communications at CES with management, along with expectations of higher capital expenditures in 2026, suggest these estimates are likely to be revised upward after the Q4 report.

Meanwhile, John Vinh of KeyBanc predicts NVIDIA’s revenue for Q4 will be $69 billion, with expectations of $74-75 billion for Q1. He pointed out that increased shipments of Blackwell B300/GB300 products (which have higher average selling prices) will be a positive factor.

He estimates that revenue from H200 products for China will increase by $3-3.5 billion in Q4, and another $2-3 billion in Q1. Vinh also expects data center revenue to grow 24% quarter-over-quarter, and computing business revenue to increase 27%, but warns that GDDR memory shortages could impact the gaming segment.

Gil Luria, Managing Director at DA Davidson, said, “There’s no reason NVIDIA won’t deliver a solid quarterly report,” and with support from clients like Amazon, its guidance could be encouraging — during this earnings season, Amazon, Microsoft, and META have all reaffirmed or raised their capital expenditure forecasts.

How will the earnings impact the stock price?

Over the past few months, NVIDIA’s stock has been range-bound, rising only 1.7% since early Q4 last year, slightly below the S&P 500’s 3.3% gain during the same period. Investors are betting that this week’s earnings could cause some volatility.

Currently, option pricing indicates that traders expect NVIDIA’s stock to fluctuate up to 6% this week — clearly influenced by the earnings report.

However, despite NVIDIA’s typically strong performance, its stock doesn’t always go higher. As strategists note, when the market gets used to surprises, “the marginal effect of surprises” diminishes.

In fact, past NVIDIA earnings reports have often led to short-term “sell-the-fact” pressure: In the last four quarters, even when NVIDIA beat expectations in three, the stock price tended to fall the day after the report — but then continued to rebound and hit new highs in the following months.

Regarding the impact of earnings on the stock price, David Morrison, Senior Market Analyst at Trade Nation, is optimistic, believing this latest report could boost NVIDIA’s stock: “The stock could see a significant rise,” he said, noting that the market will focus on data center revenue, cloud service spending, and profit margins.

“Initial reports will focus on revenue and EPS, and how these compare to expectations,” he added. “Additionally, NVIDIA often surprises investors with optimistic forward guidance. If there’s good news here, it should support the stock.”

Morrison emphasized: “Data center revenue, chip demand, and large-scale cloud service spending are key factors,” while competition and profit margins will also be closely watched.

He summarized, “For a company with the largest market cap, many factors are at play. There was a time when NVIDIA’s stock seemed unstoppable. But that’s less certain now. Regardless of the outcome, NVIDIA’s performance will significantly influence the broader market.”

Currently, NVIDIA remains the world’s most valuable company, with a market cap well over $4 trillion, and its stock accounts for about 8% of the S&P 500. Such volatility could have widespread effects on the entire market.

(Source: Cailian Press)