As Nvidia Corp. approaches its next earnings report, investor focus is sharply centered on the company's current Hopper chip family and the much-anticipated Blackwell lineup. The looming question on Wall Street isn't just whether Nvidia will meet or exceed expectations for the quarter but also how supply constraints on its Hopper platforms might impact its performance. Rosenblatt Securities analyst Hans Mosesmann has flagged this as the "wildcard" factor that could sway investor sentiment.
Nvidia, a key player in the AI and semiconductor sectors, has seen its stock soar as it continues to dominate the AI chip market. However, concerns have emerged over potential delays in the rollout of the Blackwell chips, with reports suggesting that shipments might face initial delays. Despite these concerns, Mosesmann remains optimistic, suggesting that any delay in Blackwell's launch would have a "limited impact" on Nvidia, especially given the current tight supply environment.
In the lead-up to the earnings announcement, Nvidia's current chip family, Hopper, remains in the spotlight. The demand for AI-driven technologies has intensified, particularly among hyperscalers like Super Micro Computer Inc., which are increasingly adopting liquid-cooled rack-scale implementations to manage the heavy power requirements of AI systems. Interestingly, while Hopper wasn't originally designed with liquid cooling in mind, it appears to be benefiting from this mid-cycle adoption, which could bolster Nvidia's performance in the short term.
Nvidia's upcoming earnings report is expected to show robust growth, with Citi Research analyst Atif Malik predicting that Street estimates will likely rise for the October quarter. Malik anticipates that Nvidia's commentary on the Blackwell chips will reassure investors about the company's strong financial prospects going into 2025. Moreover, he expects the stock to hit new 52-week and all-time highs, reflecting ongoing confidence in Nvidia's market position.
Nvidia's stock has been on a remarkable run, buoyed by the AI revolution that has turned it into one of the most valuable companies in the world, with a market cap exceeding $3 trillion. However, this meteoric rise has also led to concerns about whether the stock has become overvalued. Nvidia's shares rose nearly 150% in the first half of the year, leading some analysts to warn of a potential bubble reminiscent of the late 1990s tech boom.
The broader market has felt the ripple effects of Nvidia's stock movements. As one of the largest contributors to the S&P 500's performance this year, Nvidia's stock fluctuations have had an outsized impact on the index. A recent decline in Nvidia's stock, driven by fears of overvaluation, contributed to a nearly 10% drop in the S&P 500 from its all-time high. This correction was seen by some market watchers, such as Lisa Shalett of Morgan Stanley Wealth Management, as a necessary cooling of the market's enthusiasm.
Next week's earnings report is crucial for Nvidia, as it will reveal whether the company can sustain its growth trajectory amid these high expectations. A strong performance could reaffirm the market's confidence in Nvidia, while any sign of weakness could trigger further volatility in its stock. Investors will also be keen to see how Nvidia navigates the transition from Hopper to Blackwell and whether the company can maintain its leadership in the AI chip market.
The anticipation around Nvidia's earnings report is so significant that it has overshadowed other major events, such as Federal Reserve Chair Jerome Powell's recent speech on interest rates. As Bank of America strategists noted, Nvidia's upcoming report has captured the market's attention, with many seeing it as a bellwether for the broader tech sector.
