Nvidia Corp. (NVDA Stock) - Q1 Earnings on May 24, Implications?

Nvidia Corp. (NASDAQ: NVDA) will release its earnings for Q1 2023 on May 24. Can they maintain a 127% YTD rally? Santa Clara, California-based world’s leading chip manufacturer recorded growth in 2023. Analysts expect its revenue to be $6.532 Billion; the last earnings were also positive, with $6.051 Billion and a hike of 0.60%.

Nvidia Corporation – Earnings Expectations & Financial Analysis

Nvidia will announce its earning today after the market closes & with its prowess to provide chips for AI has been a critical factor in the growth so far. In the earnings report, the net income is expected to drop 8% to $1.48 Billion from $1.61 Billion Year-on-Year (YoY). Also, the revenue is expected to drop by 21%, its most significant drop since 2019.

The data centre business might emerge as a winner with a projected growth of 3% to $3.88 Billion. Considering the statistics, the adjusted Earnings per share in Q1 2022 was $0.91, while the essential EPS currently stands at $1.76.

Similarly, revenue in Q1 2022 was $5.66 Billion, and in Q1 2023 expected to be around $6.51. The revenue from its data centre was $2.05 Billion in Q1 2022 and is expected to be around $3.88 in Q1 2023.

The recent boom in the AI industry would help Nvidia’s rally, as it is regarded as a leading chipmaker for AI applications and supercomputers. OpenAI’s ChapGPT took the world by storm and was trained using Nvidia Graphic Processing Units (GPUs). Estimates are that the company could have a 90% market share in data centre processing.

Interestingly, NVDA shares outperformed the S&P 500 and the S&P 500 Information Technology sectors with a gain of 9% and 25.5%, respectively, YTD.

At press time, NVDA stock was trading at $306.88 with a drop of 1.57%; previous close and open were at $311.76 and $310.00, respectively. The 52-week change is a jump of 80.78%. With an average volume of 46.27 Million shares, the market cap for the company is $758.954 Billion. Analysts gave a 2.74 rating for moderate buy and placed the price target at $270.97 with a 9.8% downside.

The operating expenses increased 27.01% in Q1 2023 to $2.58 Billion, while the net profit margin dropped by 40.52% to $23.37 compared to last quarter. The trailing twelve months (ttm) revenue for Nvidia stands strong at $26.97 Billion, revenue per share is at $10.85, and the quarterly revenue growth saw a drop of 20.80%.

Gross profit was reported at $15.36 Billion, total cash in hand is $13.3 Billion, and the total debt is $12.03 Billion. The price-to-sales ratio is 28.63, more than expected. EBITDA stands at $7.12 Billion.

Nvidia Corp. (NASDAQ: NVDA) – Candle Exploration

The upward trajectory of EMA, ascending trend line and the RSI rating of 62.62 all indicate bullish momentum. Amidst the earnings announcement, the NVDA stock price is slightly down, probably because of profit booking. However, a positive report could fuel the rally.

If the report comes positive, the NVDA stock price could enter the supply zone and test the $345.00 mark. Negative earnings could pull the price down; however, before entering the demand zone, the price needs to test the immediate support at $279.01.

Moreover, the upward-moving consolidation will continue if the earnings are positive. Considering Nvidia’s exposure to the AI industry, the possibility of a drawdown is limited.

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Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing