Nvidia’s Q2 Earnings: A Potential Turning Point for the AI Industry

August 29, 2024 03:47 PM AEST | By Team Kalkine Media

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Nvidia is scheduled to release its second-quarter earnings report after market close, an event analysts are heralding as one of the most significant for the U.S. economy this year. The company’s performance is closely watched due to its impressive growth trajectory and its critical role in the burgeoning artificial intelligence (AI) sector.

Nvidia’s stock has experienced substantial growth, rising approximately 2,872% over the past decade and increasing more than 165% in the past 12 months. This meteoric {Graphical processing units} (GPUs) rise is reflected in the company's recent performance, with record-breaking revenues and a market capitalization peaking at $3.162 trillion. In June, Nvidia briefly surpassed Apple and Microsoft to become the world’s most valuable company by market cap.

For the first quarter of the fiscal year, Nvidia reported record revenue of $26 billion, marking an 18% increase from the previous quarter and a 262% rise year-over-year. Prior to this earnings report, Nvidia had projected second-quarter revenue to be around $28 billion. However, analysts are speculating that the actual figure may approach $29 billion, as indicated by a CNBC report. This earnings announcement has been termed the “Super Bowl” of financial reports, due to its anticipated impact on the U.S. economy, comparable to the significance of the U.S. jobs report.

Nvidia’s role in the AI market is a central focus of this earnings report. The company’s graphical processing units (GPUs) are integral to training large language models such as OpenAI’s ChatGPT and Anthropic’s Claude, positioning Nvidia at the forefront of the AI boom. The demand for Nvidia’s chips is expected to influence the AI sector’s trajectory significantly over the coming quarters.

Analysts will closely examine not only the reported figures but also Nvidia’s projections for the third quarter and any updates regarding its “Blackwell” next-generation AI chips. There are reports of potential delays in one of the hardware models, and CEO Jensen Huang is anticipated to address these concerns and their possible impact on future revenues.

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