EARNINGS PRIMER: NVIDIA (NVDA) earnings due 25th February at 21:20GMT/16:20EST

NVIDIA Corporation (NVDA) EPS (exp. 1.54), Revenue (exp. 66.12bln), Next Qtr. EPS (exp. 1.67), Next Qtr. Rev. (exp. 71.64bln), Current FY EPS (exp. 4.70), Current FY Rev. (exp. 213.87bln), Next FY EPS (exp. 7.82), Next FY Rev. (exp. 329.72bln) 

SUMMARY:

• Investors closely watch its metrics given its leadership in AI, with its guidance also of paramount importance, in addition to the Blackwell production ramp, and gross margins. Nvidia continues to benefit from surging CapEx, with AMZN, GOOGL, META and MSFT having already committed USD 622bln in 2026, while CEO Huang has reiterated the strong trajectory of AI chip demand. Although, some do note signs of risk to Nvidia's long-held dominance are also emerging from hyperscalers' plans to design their own cheaper AI chips. Participants will be looking at the geopolitical landscape as commentary regarding China still remains a wildcard. Options pricing suggests a move of roughly +/- 5.5%. In terms of Nvidia performance, YTD shares are up 2.7% and trading at around USD 190/shr, vs ATH's of USD 203.20/shr. After earnings and the conference call, attention turns to the GTC in mid-March.

SENTIMENT:

• Sentiment remains highly constructive, with most expecting further upside surprises to both quarterly numbers, and also guidance. The sell-side consensus going into the results is for revenue to exceed expectations, with UBS forecasting a top-line beat of around USD 2.5bln and Oppenheimer pointing to a “typical” USD 2-3bln upside. Trading desks expect a continued strong ramp-up of GB300 through H1, while Morgan Stanley believes a robust Vera Rubin ramp will ease any share concerns and sees scope for outperformance from current levels. Morgan Stanley also said it would welcome greater clarity on Nvidiaʼs work with OpenAI, which it said would need to rebound for the partnership to remain strategically important over the longer term. Citi recommends adding to NVDA, arguing valuation appears attractive and the stock is likely to outperform in H2 ‘26 as demand visibility extends into 2027.

EXPECTATIONS:

• For Q4, adj. EPS is forecast at USD 1.54, revenue at USD 66.12bln and gross margins at 74.97% vs. 73.60% in Q3. Data centre revenue is expected at USD 59.9bln versus USD 51.2bln, while gaming revenue is seen at USD 4.1bln versus USD 4.3bln. For the next quarter, profit and revenue are projected at USD 1.67 and USD 71.64bln, respectively. For the full year, EPS is seen at USD 4.70 and revenue at USD 213.87bln, with significant attention on the scale of any upside to the USD 500bln CY25-26 data centre target.

Sell Side into earnings:

Stifel:

• Expectations ahead of earnings are quite consistent with its thinking 90 days ago, i.e. navigating a well understood demand acceleration story against longer-term concerns on the sustainability of AI infrastructure spend.
• Remains on the bullish side, particularly with respect to NVDA shares, as it continues to believe that it is still in the early innings of what it expects to be a long-tailed investment cycle for AI infrastructure.
• Stifel's conversations with Co. mgmt. at CES in early Jan., together with higher 2026 hyperscalers CapEx outlooks suggest 2026 NVDA estimates are likely moving higher post the Q4 report.
• Adds that this outcome is not likely to surprise many and the investor debate will remain focused on what near-term communications could mean for longer-term (2027/2028) growth.
• On that, Stifel expects AI compute/infrastructure demand to extend from here with NVDA still best positioned to benefit.

KeyBanc:

• Reiterates ‘Overweight’ rating and PT of USD 275 ahead of earnings this week as expect improving B300/GB300 and China to drive strong results.
• Expects NVDA to report strong results/guidance with revenue of USD 69bln and next quarter revenue guidance of USD 74-75bln.
• Expects key drivers of upside to include: 1) Increasing shipments of Blackwell; 2) Shipments of H200 to China, which KeyBanc estimate will contribute USD 3-3.5bln in Q4 and USD 2-3bln in next quarter. However, GDDR memory shortages are likely to negatively impact Gaming shipments.

Oppenheimer

• Reiterates ‘Outperform’ and PT of USD 265.
• Sees "typical" USD 2-3bln upside potential to St. Q4 numbers and Q1 sales to USD 65.6bln and USD 71.6bln, respectively, led by GB300 Ultra.
• Vera Rubin on track for volume/prod. ramp Q3 followed by VR300 Ultra early Q3 ‘27.
• China represents incremental USD 50bln TAM pending H200 license approvals, a "when" not an "if" in Oppenheimer’s view.
• Concludes NVDA is the ubiquitous AI platform best positioned to win.

RBC:

• Reiterate ‘Outperform’ and expecting solid quarter.
• Looking for a 3-4% beat/raise and expect mgmt. to talk-up and/or raise previous USD 500bln+ backlog number for 2025/26.
• On GM, RBC feels comfortable despite surging memory prices as it believes NVDA already locked in 2026 HBM pricing.
• Ahead, Blackwell-trained Frontier model launches and GTC conference are potential catalysts.
• Conversations in the supply-chain point to strong growth projections for Rubin, which should help extend the momentum into 2027. RBC adds China (H200) is not in its model and valuation is at a double-digit discount to peers/Mag7.

Susquehanna:

• PT USD 250 as it notes GB300 ramp expected to continue through H1 ’26 with the key investor debate around the size of upside to their USD 500bln CY25/26 data centre target.
• Expects better results and guidance as GB300 continues to ramp through H1 ’26.
• Top five hyperscalers are now expected to increase CapEx +60% Y/Y in 2026, far exceeding prior St. exp. of +24% Y/Y. Susquehanna adds, importantly, at CES CFO Kress reiterated Cos. prior forecast of ~USD 500bln of combined Blackwell/Rubin revenue in 2025 and ‘26. Moreover, Kress hinted at further upside as she noted in early Jan. that this ~ USD 500bln figure had “definitely gotten larger”.
• Lastly, mgmt. suggested several times during CES that “demand is strong”, giving US further confidence in Cos. ability to achieve their revenue targets.
• Ramp of VR200 in H2 will be important to achieve their >USD 500bln target as Rubin comes with a higher ASP.

Citi:

• Maintain ‘Buy’ and PT of USD 270 on consistent P/E of 30x CY27 expected EPS.
• Citi models sales of USD 67bln above St. exp. of USD 65.6bln and see next quarter revenue outlook of USD 73bln (exp. 71.6bln).
• Expects continued strong ramp of B300 with Rubin launch to drive a 34% H/H acceleration in H2 ’26.
• Citi believes most investors are looking past the earnings to annual GTC conference in mid-March for Nvidia to talk about inference roadmap using Groq's low latency SRAM IP and provide an early outlook for 2026/27 AI sales.
• Expects FY27 GM outlook of ~75% and assume high-30% OpEx growth or same as FY26.
• Recommends investors add to NVDA as valuation looks attractive with the stock likely to outperform in H2 ’26 as demand visibility extends into 2027.
• Lifts its FY26 & ’27 expected EPS ~1%.

Truist:

• Reiterate ‘Buy’ and PT of USD 275 into earnings.
• Expect constructive results, commentary, outlook and catalysts.
• Adds Nvidia has underperformed semis in the last six months.
• Believes results and next quarter outlook will likely top consensus, and expect mgmt. to offer optimistic comms. about its products, demand, supply, and longer-term drivers.

Wedbush:

• Fully expects the tech behemoth will comfortably top estimates and guide above the St., due to continued positive data points through Q4 as well as seemingly healthy spending set up through 2026.
• Continues to believe St. estimates for Nvidia are being significantly underestimated over the next few years given the global demand story for the AI Revolution.
• In addition to the Big Tech capex numbers, it sees a major boost by more enterprises, governments, and global adoption entering the picture over the next 12 to 18 months with Nvidia's Golden chips front and centre.