Nvidia, the renowned semiconductor firm, is poised to announce its fourth-quarter earnings after the closing bell on Wednesday. Investors and analysts are eagerly awaiting the results, especially in light of recent market fluctuations. Shares of Nvidia have experienced a decrease of 6% year-to-date through Tuesday, which is a stark contrast to the S&P 500's 1% gain.
Market analysts are particularly interested in how Nvidia plans to tackle challenges posed by China's DeepSeek AI model. The company must demonstrate robust demand for its next-generation Blackwell chip, ensuring that it won't be adversely affected by the emergence of DeepSeek.
According to Kunjan Sobhani, a tech analyst at Bloomberg Intelligence, Nvidia is expected to meet its fourth-quarter revenue expectations and potentially raise its first-quarter guidance. This optimism is driven by a substantial ramp-up in its Blackwell GPUs. Sobhani noted that Nvidia has successfully navigated recent supply-chain challenges and concerns about hyperscaler demand, as evidenced by its stock price recovery from the DeepSeek-related losses.
Initial shipments of the Blackwell GPUs to key customers began in the fourth quarter and are anticipated to increase through the first quarter of 2026. The increased capital-spending guidance from major players like Meta, Microsoft, Amazon Web Services, and Google further boosts confidence in Nvidia's near-term sales potential.
Nvidia's consensus fourth-quarter revenue estimate stands at $38.25 billion, with specific revenue targets across various segments:
Data Center Revenue Estimate: $34.06 billion Compute Revenue Estimate: $30.17 billion Networking Revenue Estimate: $3.57 billion Gaming Revenue Estimate: $3.02 billion Professional Visualization Revenue Estimate: $507.3 million Automotive Revenue Estimate: $459 millionThe company's adjusted gross margin estimate is 73.5%, with research and development expenses projected at $3.75 billion. Adjusted operating expenses are estimated at $3.4 billion, while the adjusted operating income is expected to reach $24.69 billion. The adjusted earnings per share (EPS) is projected to be 84 cents.
For the first quarter, Nvidia's revenue estimate is set at $42.26 billion. The adjusted gross margin is projected at 72.1%, with adjusted operating expenses estimated at $3.62 billion. Capital expenditure for the quarter is anticipated to be $760 million.
Nvidia's future performance will depend on its ability to maintain strong demand for its Blackwell chips and navigate challenges posed by international competition. Stay tuned for the latest updates as Nvidia releases its earnings report.
