What to Watch out for Nvidia's Upcoming Q2 2025 Earnings Report
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📅 Nvidia will announce its Q2 2025 earnings report on 27th August 2024
Nvidia (NVDA) has consistently outperformed the broader market in recent years, making it a favorite among investors. This year alone, its stock has more than doubled, boasting a 161% return, making it one of the top performers in the S&P 500. Since the end of 2022, Nvidia's shares have risen by around 783%, and since 2019, they've surged an impressive 3,773%.
Top tech companies like Microsoft, Amazon, Alphabet, and Meta Platforms are among Nvidia’s leading customers, providing significant revenue.
Nvidia is set to release its fiscal 2025 second-quarter results after the market closes on Wednesday. Investors are expected to focus on continued growth in the data center segment and potential updates regarding delays impacting the new Blackwell AI chip.
Nvidia's data center segment has experienced rapid growth due to increasing demand for its advanced computing technology to support AI. In the first quarter of fiscal 2025, data center revenue hit a record $22.6 billion, exceeding the previous quarter's high.
Earlier this month, reported delays in Nvidia's Blackwell chip caused a drop in the company's stock, although Nvidia has reassured investors that production remains on track for the second half of the year. Some analysts believe concerns are exaggerated, with minimal impact expected for customers.
Raymond James analysts suggested that the delay may have a "modest" effect, potentially boosting demand for Nvidia's earlier chips. They also anticipate that Nvidia’s management will downplay the rumored delays.
Despite the brief setback, Nvidia's stock has more than doubled in value this year, trading at $125.87 during early Monday trading.
The Norwegian Government Pension Fund, a major institutional investor, has recently increased its stake in Nvidia. The fund, which also holds substantial positions in Microsoft, Apple, Amazon, Alphabet, Meta Platforms, Taiwan Semiconductor Manufacturing, Novo Nordisk, and Eli Lilly, has allocated nearly 3% of its portfolio to Nvidia ahead of the company's earnings announcement.
While this is smaller than Nvidia’s 6.8% weighting in the S&P 500, it is still the fund’s third-largest holding, following Apple and Amazon, with a value of approximately $36 billion.
Nvidia in the previous quarter mentioned that it anticipates revenue for Q2 2025 to be $28.0 billion, plus or minus 2%. Furthermore, the company expects the gross margins to be in the range of 74.8% and 75.5%, respectively, plus or minus 50 basis points. For the full year, gross margins are expected to be in the mid-70% range.
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