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Nvidia reports earnings Wednesday after the close.
Akos Stiller/Bloomberg
Nvidia
might report mixed business results in its gaming segment after the market close Wednesday, but investors are likely to focus on the progress of its data center offerings.
Those products are used to power the latest artificial intelligence applications that have riveted both investors and consumers alike.
Wall Street projects
Nvidia
(ticker: NVDA) will report April quarter revenue of $6.5 billion with adjusted earnings of 92 cents a share. Analysts’ estimates for the current quarter’s revenue is $7.2 billion.
Nvidia is a leading maker of chips used for videogames, artificial intelligence, and cloud computing applications inside PC and server hardware.
Earlier this week, KeyBanc Capital Markets analyst John Vinh reiterated his Overweight rating for Nvidia stock and raised his price target to $375 from $320.
“Nvidia remains uniquely positioned to benefit” from the growing market for artificial intelligence and machine learning, Vinh wrote Sunday. “The disappointing launch of the [gaming card] RTX4070 could result in a modest miss in gaming, we anticipate investors will look through these concerns.”
The RTX4070 gaming card launched on April 13.
The company’s chips have high exposure to generative AI, which has been trending this year. The technology ingests text, images, and videos in a brute-force manner to create content. Interest in this form of AI was sparked by OpenAI’s release of ChatGPT late last year.
Wall Street analysts have a positive view on Nvidia. About 74% have Buy or equivalent ratings on the stock, according to FactSet.
Nvidia stock has surged more than 100% so far this year and 90% over the past 12 months.
Write to Tae Kim at tae.kim@barrons.com