NVIDIA(NASDAQ: NVDA) The stock’s stellar rally will be tested when the semiconductor giant releases its third-quarter fiscal 2025 results (for the three months ended Oct. 27) on Nov. 20, as investors and analysts will expect the chipmaker continue with its artificial intelligence (AI-driven surge).
After all, Nvidia stock has soared a remarkable 196% so far in 2024, as of this writing, and boasts a rich valuation. In this article, I’ll analyze Nvidia’s stock performance following the release of its previous four quarterly results before checking out what’s in store for investors when it releases its next set of results.
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The chart below summarizes the market’s immediate reaction to Nvidia’s four previous quarterly reports.
Date
Period
Revenue (in billions of dollars)
Change year after year
Earnings per share
Change year after year
Immediate change in stock price.
November 21, 2023
Third quarter of fiscal year 2024
$18
206%
$4.02
593%
-2%
February 21, 2023
Fourth quarter of fiscal year 2024
$22
265%
$5.16
486%
+16%
Can. 22, 2024
First quarter of fiscal year 2025
$26
262%
$6.12
461%
+9%
August 28, 2024
Second quarter of fiscal year 2025
$30
122%
$0.68
152%
-6%
Source: Quarterly earnings releases from Nvidia and Yahoo! Historical financial price data.
When Nvidia released its third-quarter fiscal 2024 results a year ago, shares fell thanks to concerns about the company’s business in China due to U.S. government restrictions on exports to the country. The market overlooked the company’s better-than-expected results and impressive guidance at the time.
However, the next two quarterly reports gave a nice boost to Nvidia stock as the company continued its string of healthy growth in revenue and earnings thanks to strong demand for its AI graphics processing units (GPUs). However, when Nvidia released its previous quarterly results in August this year, investors apparently took issue with the relatively slower pace of growth the company reported.
It’s worth noting that Nvidia’s revenue growth in the second quarter of fiscal 2025 was a slowdown from the growth it achieved in the previous three quarters. Of course, the company more than doubled its revenue year over year, and its profits also increased impressively, but Wall Street had become accustomed to much stronger growth in its revenue and profits by that time.
On top of that, Nvidia forecast fiscal third-quarter revenue of $32.5 billion, which would translate to a year-over-year increase of nearly 80%. Therefore, the chipmaker’s guidance indicates that its revenue will not double from the prior-year period when it releases its results on November 20. However, the bigger picture is that Nvidia stock has tripled in the last year after accounting for immediate price movements following its quarterly results.
This is not surprising, as recent market developments have made it clear that the company remains the dominant player in AI chips, a market that shows no signs of slowing down. Therefore, investors would do well to focus on the bigger picture when Nvidia releases its quarterly report.
The relative slowdown in Nvidia’s growth from previous quarters is logical, considering the company now has a much larger revenue base. Even then, an 80% increase in quarterly revenue is no easy feat, especially considering that rivals like amd They have found it difficult to make a noticeable dent in the AI chip market and are having a difficult time taking share away from Nvidia.
For example, AMD’s revenue in the third quarter of 2024 increased 18% year over year to $6.8 billion. The company’s data center business posted a 122% year-over-year increase in revenue to $3.5 billion. That pales in comparison to Nvidia’s 154% year-over-year increase in data center revenue in the fiscal second quarter, to a whopping $26.3 billion.
In other words, Nvidia is growing at a faster rate than AMD despite having a larger revenue base. This is because the company is the leading supplier of AI chips, with a market share of up to 95%. More importantly, that dominance looks set to continue as demand for Nvidia’s new generation of Blackwell AI processors will outstrip supply by 2025, which isn’t surprising as these chips are expected to maintain their technological lead over AMD’s offerings.
Analysts are optimistic about sales of Nvidia’s Blackwell processors, with a report from Morgan Stanley (via Tom’s Hardware) suggesting that the company could sell $200 billion worth of these chips next year. If that happens, Nvidia’s revenue in the next fiscal year could exceed expectations.
NVDA Revenue Estimates for Current Fiscal Year Data by YCharts
Based on the chart above, Nvidia’s top line is expected to more than double in fiscal 2025 from last year’s reading of $60.9 billion. Analysts forecast another 43% increase in revenue next fiscal year, but Blackwell’s strong demand could help it surpass that mark by a long shot.
So if Nvidia delivers a better-than-expected outlook for the current quarter due to the successful launch of its Blackwell processors, it could set the stage for more upside in this AI stock even after the huge gains it has posted this year.
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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.
Nvidia stock has done this after its last four quarterly results. Here’s What You Can Do After November 20 Originally Posted by The Motley Fool
