Nvidia's earnings report this week will be good, but investors are more interested in the March GTC conference.

NVIDIA is about to release its quarterly earnings report, with market expectations generally optimistic, but analysts believe the stock price may still react modestly. The real catalyst might have to wait until the NVIDIA GTC (GPU Technology Conference) in March.

After the US stock market closes on February 25, AI giant NVIDIA will announce its latest earnings, with a conference call scheduled for 2:00 PM Pacific Time on February 25, or 6:00 AM Beijing Time on February 26.

Bank of France analyst David O’Connor expects the tone of the report to be “quite positive,” but impressive numbers may not necessarily lead to a significant stock price increase. He believes NVIDIA might hold back its most impactful market information until the March GTC conference.

NVIDIA’s stock price has only increased about 2% this year, far behind the Philadelphia Semiconductor Index’s 16% gain over the same period. Core issues for investors this earnings season include the competitive landscape of AI chips, rising storage chip costs impacting gross margins, and the capital expenditure trends of large cloud providers.

Steady earnings expectations, but the market may have already priced in the news

According to FactSet consensus forecasts, NVIDIA’s adjusted EPS for Q4 is expected to be $1.54, with revenue of $66.1 billion, of which data center revenue is expected to be $60.7 billion. Full-year revenue is projected at $213.8 billion, and first-quarter revenue guidance is around $72.9 billion.

The issue is that strong performance over the past few quarters has failed to boost the stock price. Market expectations for NVIDIA are already quite high, leaving little room for surprises. O’Connor believes investors’ attention has already shifted to the March GTC conference.

This earnings report is also seen as a health check for AI infrastructure investments.

Andrew Rocco, stock strategist at Zacks Investment Research, states that NVIDIA’s performance will serve as a reference for assessing the health of AI spending, and will also reveal the operational status of emerging cloud computing partners like CoreWeave and Nebius Group.

Gross margins and competition are key issues

O’Connor points out that the rising prices of storage chips will be a focus during the earnings call—whether NVIDIA can maintain its gross margins under increasing cost pressures.

Another concern is competition. Custom chips like Google’s and Broadcom’s Tensor Processing Units (TPUs) are gaining attention, leading the market to question whether NVIDIA’s long-term dominance can continue.

HSBC analyst Frank Lee expects demand for NVIDIA GPUs to remain strong. This year, Alphabet, Amazon, Meta, and Microsoft plan to spend a combined $650 billion on AI infrastructure, which itself indicates substantial demand.

Frank Lee believes NVIDIA GPUs will remain the mainstream choice for AI computing power in the foreseeable future. But how long “the foreseeable future” lasts is a question no one can answer definitively.

Risk Warning and Disclaimer

Market risks are present; investments should be made cautiously. This article does not constitute personal investment advice and does not consider individual users’ specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Invest at your own risk.