NVIDIA (NVDA) Stock May Have Priced In The Best Outcome Today

NVIDIA Corporation (NASDAQ:NVDA), which has emerged as a powerhouse within the semiconductor space, is scheduled to report 1Q22 (ending January) results after the close today with a conference call following at 5:00 p.m. E.T. The company has been on an absolute tear over the past year, decimating analysts’ earnings and revenue expectations along the way. More of the same is expected tonight, as evidenced by the stock’s ~10% run higher over the past week.

NVIDIA (NVDA) Stock May Have Priced In The Best Outcome Today

Back on April 12, the leading GPU maker reported that Q1 revenue is tracking above the $5.30 bln outlook it provided during the Q4 earnings conference call. CFO Colette Kress added that the outperformance is being driven by strength across each of the company’s segments and that demand is expected to exceed supply for most of the year. Since that update, analysts’ estimates have crept higher to $5.4 bln from $5.2 bln. On the bottom-line, NVDA is forecasted to generate EPS of $3.28.

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With each passing quarter, NVDA has one-upped itself in terms of surpassing consensus estimates. Last quarter, the company crushed the EPS estimate by $1.12, following beats of $0.99 and $0.50 in the two preceding quarters. The story on the top-line is very similar as growth has accelerated from the upper-30% range in 1Q21 to over 60% in 4Q21, resulting in substantial upside performance.

There are a few catalysts underlying NVDA’s rise, but the evolution of artificial intelligence (AI) and the company’s strong technological position within AI is at the core of its success. This is especially true in the data center market as the infusion of AI technologies across cloud computing providers has created a windfall for the company. Last quarter, NVDA’s Data Center (DC) segment posted growth of 97%, which actually represented a slowdown from Q3’s 162% surge.

Michael Rowels

Weekend Contributor. Writing for business and finance publishers has become his passion over the last decades after he completed a master's degree in Financial Management. Sharing some opinions and forecasts to thousands of readers is a routine job for him but he never promises to invest in one stock.