Nvidia is set to report on Wednesday that its quarterly sales have more than doubled, even as year-over-year growth begins to decelerate. This makes it one of the most closely watched earnings reports on Wall Street.
Analysts anticipate the U.S. chipmaker will announce $28.7 billion in revenue for the quarter, reflecting a 100% increase compared to the previous year. However, this would mark a significant slowdown from the prior quarter when revenue growth skyrocketed by 262%, driven by overwhelming demand for its AI-powered chips.
Investors will be particularly focused on how delays in the release of Nvidia's next-generation Blackwell chips might affect its impressive growth trajectory.
Nvidia has quickly become a key indicator for investors tracking whether the months-long AI spending boom might be cooling down. This has led to potential market volatility surrounding the announcement, as Nvidia's stock has contributed to more than a quarter of the year-to-date gains in the S&P 500.
There are already signs that some investors are bracing for broader market impacts from Wednesday’s report. Last week, options markets were pricing in a 1.3% swing in the S&P 500 on the first day of trading after Nvidia releases its results, according to data from Citi—on par with the expected volatility of the upcoming Federal Reserve meeting. Additionally, options were pricing in a potential 10% swing in Nvidia’s stock in either direction.
Nvidia’s shares have surged more than 160% this year, but recent weeks have seen increased volatility as investors reassess their positions on AI-related stocks. Information technology and consumer discretionary sectors—including tech giants like Amazon and Tesla—have been among the worst performers in the S&P 500 during the third quarter. At its lowest point during a recent market downturn, Nvidia’s stock was 35% below its all-time high. By last Friday, it had recovered most of those losses but remained 8% below its peak.
Despite these concerns, there are few indications that the AI spending spree by companies like Google, Microsoft, Meta, and Amazon is slowing down. Consequently, many analysts expect Nvidia to deliver another strong quarter.
However, potential challenges remain. The rollout of Nvidia’s next-generation GPUs, known as Blackwell, has been delayed due to manufacturing issues with its partner TSMC. Nvidia CEO Jensen Huang mentioned during the company’s earnings call in May that he expected Blackwell to contribute "a lot" of revenue this year.
Citi analysts recently highlighted that investors would focus on the demand for Nvidia’s current generation of Hopper chips, which could mitigate the impact of Blackwell’s delays.
HSBC analysts downplayed concerns, suggesting there is no significant downside risk to Nvidia’s earnings in 2025 and 2026 due to the Blackwell delay. They remain optimistic about the upcoming results, expecting revenue to surpass expectations and reach $30 billion.
Earnings reports from Big Tech companies involved in the AI race have provided insight into the spending spree that has benefited Nvidia. In its July results, Google reported another increase in capital expenditure, rising to $13 billion for the quarter ending in June, partially reflecting its ongoing investments in Nvidia’s chips. Meta, Microsoft, and Amazon have similarly indicated plans to continue substantial spending on AI.
However, the ongoing focus on spending, without clear guidance on when it will translate into earnings and productivity growth, has unsettled some investors already concerned about stretched valuations among large tech companies.
Spending by a small group of Big Tech AI “hyperscalers” constitutes nearly half of Nvidia’s data centre business revenue, which has rapidly become the company’s primary source of income.
