Nvidia’s Earnings Report Sparks Investor Anticipation
Nvidia NVDA is in the spotlight as it prepares to publish its third-quarter earnings on Wednesday, November 20. Investors are eager, hoping for robust results that could drive a broader market rally.
Recently, Nvidia surpassed Apple AAPL to become the largest company by market capitalization, exceeding $3 billion.
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What to Expect from Nvidia’s Q3 Performance
Nvidia’s Q3 sales are projected to rise by 82% to $33.1 billion compared to $18.12 billion in the same quarter last year. Analysts expect the company’s earnings per share (EPS) to jump 85% to $0.74, up from $0.40 per share a year prior.
The Zacks Expected Surprise Prediction (ESP) suggests Nvidia might again exceed earnings forecasts, with the Most Accurate Estimate for Q3 EPS at $0.76, 2% above the Zacks Consensus.
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Nvidia outperformed earnings expectations by 6% in August, reporting Q2 EPS at $0.68 against forecasts of $0.64. The company has established itself as a leader in chips for artificial intelligence, beating earnings estimates for seven consecutive quarters, with an average EPS surprise of 12.7% in its last four reports.
Additionally, Nvidia has beaten top-line estimates for 22 quarters in a row, averaging an 8.36% sales surprise in the last four quarters.
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Examining NVDA’s Current Trends
Stock Performance
This year, Nvidia’s stock has surged nearly 200%, greatly outpacing its tech peers like Meta Platforms META and Tesla TSLA, which are up 57% and 38%, respectively. In contrast, AMD AMD has seen its stock decline by 6% this year.
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Comparative Valuation (P/E)
Currently, shares of NVDA trade around $144, reflecting a price-to-earnings (P/E) ratio of 49.4 times forward earnings. This is significantly above the S&P 500’s 24.9 times and AMD’s 42 times. Yet, NVDA is nearing its 10-year median P/E of 44.3 and remains well below its peak of 118.6 times.
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Earnings Estimates for NVDA
A crucial factor in deciding whether to invest in NVDA is the trend in earnings estimate revisions. Over the past 90 days, EPS estimates for Nvidia have increased, with recent upward adjustments for fiscal years 2025 and 2026.
According to Zacks estimates, Nvidia’s annual earnings are expected to rise by 118% in FY25 to $2.84 per share, up from $1.30 in FY24. Furthermore, FY26 EPS is projected to climb an additional 38% to $3.92.
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Conclusion
If Nvidia meets or exceeds expectations this quarter, its stock may continue to rise. Currently, NVDA holds a Zacks Rank #1 (Strong Buy), supported by positive earnings revisions and the Zacks ESP indicating strong earnings potential.
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