Nvidia Corp (NVDA), the AI-chip powerhouse valued at $3.6 trillion, was set to report its fiscal third-quarter earnings on November 20, with the technology sector closely monitoring what many consider the season's most anticipated financial report. The company, which controls approximately 80% of the high-end AI chip market, serves major tech giants, including Alphabet Inc's (GOOGL), Google, Microsoft Corp (MSFT), and Tesla Inc (TSLA). However, recent reports have cast a shadow over the company's next-generation chip development.
According to The Information, Nvidia is grappling with overheating issues in its upcoming Blackwell processors when installed in high-capacity server racks. The report indicates that the company has undergone multiple server rack redesigns to address these thermal challenges, raising concerns among customers about potential deployment delays.
Despite these reports, market observers remain largely optimistic about Nvidia's prospects. "Nvidia's earnings on Wednesday will be the grand finale of the earnings announcement season," Louis Navellier, chairman and founder of Navellier & Associates, said. He noted that the company's new Blackwell GB200 GPU, which cost roughly $2 billion to develop, "will dominate its sales for the next couple of years." Navellier expressed confidence in Nvidia's market position, stating that "as it develops even more powerful GPU successors to Blackwell, I do not expect any competitor to crack Nvidia's monopoly on generative AI."
Co-Founder and CEO Jensen Huang has described demand for the new Blackwell AI chips as "insane." The chips reportedly perform at speeds approximately two and a half times faster than Nvidia's current H100 (Hopper) chips for AI model training, and about five times faster for real-world applications. James "Rev Shark" DePorre of TheStreet Pro highlighted Nvidia's unique position in the AI landscape. "Nvidia is often lumped in with all the other AI plays, but there is a significant difference," he wrote. "Nvidia provides the tools that are used in the development of AI."
Market analysts have recently adjusted their projections for the company. Truist raised its price target to $167 from $148, maintaining a buy rating. The firm anticipates results exceeding analyst consensus and expressed optimism about 2025 performance, citing a strong backlog. Similarly, Stifel increased its price target to $180 from $165, also maintaining a buy rating. The firm noted that supply-chain indicators and industry discussions suggest positive momentum, though it expects a Blackwell-driven upturn more likely in the April quarter than January.
Analysts polled by LSEG expect Nvidia to report earnings of 75 cents per share and revenue of approximately $33.12 billion, representing nearly 83% growth from the previous year. The company's stock has seen remarkable growth, tripling in value over the past year. Shares closed up 4.9% at $147.01 on November 19.
Stephen "Sarge" Guilfoyle, speaking to TheStreet anchor Conway Gittens, expressed confidence in Nvidia's quarterly performance but raised questions about long-term margin sustainability. "I don't doubt Nvidia going into this quarter," the veteran trader said. "I just wonder how far we can go with this before margins at least contract."
