Chris Morris
4 min read
In This Article:
Nvidia’s earnings have become some of the most closely watched numbers on Wall Street. The company makes up about 6.5% of the Nasdaq 100 and 5.5% of the S&P 500, so a good quarter can send the Nasdaq index soaring. A marginal or poor one can send it tumbling.
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On Wednesday, May 28, after the market closes, the innovative chip giant will report its fiscal first-quarter results for 2025, and expectations are once again high. Analysts expect Q1 revenue to grow 66% year over year to $43.28 billion, according to the London Stock Exchange Group (LSEG). That’s not the 262% increase it had in Q1 of last year, but it’s still an impressive advance. Adjusted earnings are expected to come in at $0.73 per share.
Nvidia stock (Nasdaq: NVDA) is already on the rise in advance of earnings, gaining more than 3% as of 3 p.m. ET Tuesday, with shares topping $135. Year to date, shares of NVDA are down 2%.
Despite the high hopes, though, Nvidia is facing some substantial obstacles—and investors will be looking to see what sort of impact those will have. Last month, the Trump administration put export limits on Nvidia’s H20 chip. That led the company to announce a Q2 write-down of $5.5 billion that was related to inventory and purchase commitments for the chip.
The longer-term impact of those restrictions could be worse. David O’Connor, of BNP Paribas, wrote in a note Tuesday: “This inventory write-off implies a $15 billion H20 revenue hit on a rolling 12-month basis.”
The limitations on sales to China could wreak some havoc in the near term for Nvidia. Bank of America analysts warned that guidance for the second quarter could be “messy,” saying “[Nvidia] could guide [second fiscal quarter revenue] to as low as $41 billion, below recently lowered ~$46 billion consensus.” Earnings per share consensus (an average of analyst expectations) could be lowered significantly as well in the second fiscal quarter.
While the short term could be rocky, analysts are more interested in the back half of the year—and will be listening to what the company has to say about the third and fourth quarters. Nvidia is reportedly working on a new chipset for China that would be compliant with the most recent regulations. And big contracts beyond China could potentially help make up any near-term shortfall.
