Unmatched Potential: Nvidia’s Second Quarter Estimates Point to AI Dominance

Chipmaker Nvidia Corp. is poised to release its fiscal year 2024 second-quarter report this week, and industry analysts are anticipating strong performance from the company. John Vinh, an analyst at KeyBanc Capital Markets, reiterated an “overweight” rating on Nvidia, expressing optimism about its future prospects in the market. With a price target of $620, Vinh believes that Nvidia’s unique position in monetizing generative AI trends sets it apart from its competitors.

Nvidia has been a dominant force in the AI industry, and its second half is expected to continue the trend of growth. Vinh points out that industry capacity remains limited in the near term, creating opportunities for Nvidia to thrive. The demand for AI technologies is accelerating, and Nvidia is capitalizing on it. Moreover, the company’s high-performance chips, utilizing chip-on-wafer-on-substrate technology, are supplying the market’s needs efficiently.

One potential concern is the impact of extended China export restrictions on data center GPUs. However, Vinh believes that any short-term effects will be mitigated as other customers will fill the gap left by China’s reduced demand. Additionally, Nvidia’s upcoming L40S ramp, which offers attractive pricing and competitive performance, is expected to address China’s pent-up demand while avoiding export restrictions.

The KeyBanc analyst is confident in Nvidia’s ability to maintain its dominance in the AI and machine learning sectors. With its CUDA software stack, Nvidia has created significant barriers to entry, limiting competitive risks. Vinh foresees Nvidia remaining at the forefront of cloud and enterprise workloads, crucial drivers of growth in the industry.


1. What is Nvidia’s competitive advantage?
Nvidia’s CUDA software stack provides a significant barrier to entry for competitors, giving the company a unique advantage in the market.

2. How is Nvidia addressing China’s demand for data center GPUs?
Nvidia’s upcoming non-CoWoS-based L40S ramp offers an attractive solution to China’s demand by providing competitive performance, attractive pricing, and avoiding export restrictions.

3. What are the analyst estimates for Nvidia’s second quarter revenue and earnings per share?
KeyBanc projects second-quarter revenue of $12.7 billion and earnings per share of $2.49, exceeding the consensus estimates of $11.17 billion and $2.07, respectively.

Nvidia’s stock has been performing exceptionally well, gaining over 196% year-to-date and making it the top-performing stock in the S&P index this year. As Nvidia prepares to announce its second-quarter results, investors eagerly await updates on the ramp and uptake of the H100 chips, insights into 2024 orders and visibility, and updates on AI GPU capacity to meet the growing demand.

(Source: Benzinga Pro)