Eugene Investment & Securities predicts that Nvidia will exceed market expectations for its second-quarter earnings this year but also warns that its stock growth may slow down due to reduced growth rates.
In a report released on the 26th, Eugene Investment & Securities estimated that Nvidia would achieve $29.9 billion in sales in Q2, a 15% increase from the previous quarter. This figure surpasses Nvidia’s own guidance of $28 billion and Wall Street’s forecast of $28.68 billion. Lee Seung Woo, head of the Eugene Investment & Securities Research Center, said, “Considering that Nvidia’s past earnings have significantly exceeded guidance, we expect them to surpass market expectations this time as well.” Lee also projected Nvidia’s gross profit margin (GPM) and earnings per share (EPS) to be higher than the market estimates, at 77% and $0.69, respectively.
However, despite the strong performance, Lee warned that Nvidia’s stock growth may not be as strong as before due to slowing growth rates. He predicted that Nvidia’s Q2 data center revenue would increase 17% to $26.3 billion from the previous quarter, a much lower growth rate than the 427% increase in the last quarter. Lee noted, “In the past two earnings announcements, Nvidia’s stock jumped by 16% and 9%, respectively, but this time, the earnings surprise may not be as large.”
“Rather than focusing on the Q2 earnings themselves, attention should be on Nvidia’s guidance for its Blackwell chip and GPM, which will play a key role in the U.S. stock market and tech sector leading up to the presidential election, especially with the Fed’s rate cuts already expected,” Lee added.
Nvidia is set to announce its Q2 fiscal 2025 (May to July) earnings after the U.S. stock market closes on the 28th, which will be early morning on the 29th in Korea.
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