NVIDIA Corporation NVDA is poised to exceed expectations during the forthcoming report on its fourth-quarter fiscal 2024 outcomes after markets close on February 21.
For the fiscal fourth quarter, the company anticipates revenues of $20 billion (+/-2%). The Zacks Consensus Estimate is fixed at $20.21 billion, an impressive 234% surge from the year-ago reported figure.
The Zacks Consensus Estimate for quarterly earnings is $4.54 per share, signaling a remarkable 415.9% year-over-year growth from the year-ago quarter’s earnings of 88 cents per share.
The company has surpassed the Zacks Consensus Estimate for earnings thrice in the preceding four quarters while falling short on one occasion, with an average surprise of 19%.
Let us delve into the factors that have shaped the company’s trajectory before the impending announcement.
NVIDIA Corporation Price and EPS Surprise 
NVIDIA Corporation price-eps-surprise | NVIDIA Corporation Quote
The Force Behind NVIDIA’s Growth
The sustained vigor of its Datacenter business in the wake of the escalating adoption of cloud-based solutions amid the burgeoning hybrid working trend is anticipated to elevate NVDA’s fourth-quarter revenues. An upswing in Hyperscale demand and burgeoning adoption in the inference market are projected to have acted as tailwinds in the upcoming quarter.
Moreover, the Datacenter end-market business is likely to have benefited from the burgeoning demand for generative AI and large language models employing GPUs based on NVIDIA Hopper and Ampere architectures. The intense appetite for its chips from major cloud service and consumer internet companies is expected to have propelled the segment’s top-line in the impending quarter. Our estimate for third-quarter revenue for the Datacenter end market stands at $16.4 billion, marking a substantial 354.2% year-over-year upsurge.
Additionally, NVIDIA’s performance in the fourth quarter is expected to have reaped rewards from the recovery across its Gaming and Professional Visualization end markets. The Gaming end market has shown signs of recovery in the last three quarters as inventory with channel partners returned to normal levels. The company has also witnessed strong demand for its gaming products across most regions.
Earnings from the Gaming end market surged by 81% year over year and 15% sequentially to $2.86 billion in the third quarter of fiscal 2024. Our revenue forecast for the Gaming end market in the fourth quarter stands at $2.83 billion, reflecting a substantial 54.7% increase from the prior-year quarter.
NVIDIA’s Professional Visualization segment also experienced a resurgence, with revenues soaring by 108% year over year and 10% sequentially in the third quarter. This trend is anticipated to have persisted in the fourth quarter. Our projection for fourth-quarter revenue for the Professional Visualization end market stands at $433.3 million, indicating a robust 91.7% surge from the year-ago quarter.
Furthermore, the company’s Automotive segment demonstrated an uptick in trends in eight of the last ten quarters, likely driven by growing investments in self-driving and AI cockpit solutions. Our fourth-quarter revenue estimate for the Automotive end market stands at $294.5 million, suggesting a 0.2% year-over-year increase.
Earnings Whispers
Our recognized model foresees an earnings beat for NVIDIA this earnings season. The presence of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) enhances the likelihood of an earnings beat, which is the case here.
Earnings ESP: Earnings ESP, representing the variance between the Most Accurate Estimate ($4.71 per share) and the Zacks Consensus Estimate ($4.54 per share), stands at +3.67%. This underscores the best stocks to buy or sell before their reporting by utilizing our Earnings ESP Filter.
Zacks Rank: NVIDIA holds a Zacks Rank #2.
Other Stocks With a Favorable Outlook
As per our model, Synchronoss Technologies SNCR, AutoZone AZO, and Booking Holdings BKNG are also poised to outstrip estimates in their forthcoming releases.
Synchronoss boasts a Zacks Rank #1 and has an Earnings ESP of +157.1%. The company is expected to announce fourth-quarter 2023 results on March 5. Its bottom-line result exceeded the Zacks Consensus Estimate twice in the last four quarters while missing estimates twice, with an average surprise of -16.8%. You can access the complete list of today’s Zacks #1 Rank stocks here.
AutoZone is slated to declare second-quarter fiscal 2024 results on February 27. The company holds a Zacks Rank #3 and an Earnings ESP of +3.83% at present. AutoZone’s earnings have surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average surprise of 8.9%.
Booking Holdings carries a Zacks Rank #3 and has an Earnings ESP of +2.07%. The company is scheduled to release fourth-quarter 2023 results on February 22. Its earnings have beaten the Zacks Consensus Estimate in the last four quarters, with an average surprise of 16.4%.
Keep up with upcoming earnings announcements using the Zacks Earnings Calendar.
Zacks Names #1 Semiconductor Stock
Although just 1/9,000th the size of NVIDIA – which surged by over +800% since it was first recommended – this new top chip stock has significant growth potential. With robust earnings growth and an expanding customer base, it is well-positioned to meet the escalating demand for Artificial Intelligence, Machine Learning, and the Internet of Things. Global semiconductor manufacturing is projected to soar from $452 billion in 2021 to $803 billion by 2028.
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