NVIDIA (NASDAQ: NVDA) is at the epicenter of the artificial intelligence (AI) revolution. The company designs the most powerful data center chips for AI development, and demand continues to outstrip supply, causing the company’s revenue and profits to skyrocket.
After the market closes today — around 5 p.m. Eastern Time and 2 p.m. Pacific Time — Nvidia will release its financial results for the second quarter of fiscal 2025 (which ended July 31). The report will give investors new insight into the chip giant’s revenue and its expectations for the rest of the year.
This is what you need to know!
Wall Street expects further increase in sales
Nvidia’s official guidance calls for total revenue of $28 billion for the second quarter, representing 107% growth over the same period last year. However, that might be conservative, as Wall Street’s consensus estimate has been steadily rising in recent months and currently stands at $28.7 billion (according to LSEG).
Given that Nvidia posted revenue of $26 billion in its first quarter (ended April 28), a whopping $2 billion more than the company originally forecast, it’s no surprise that analysts expect the second quarter to beat expectations.
The data center segment accounted for $22.6 billion of Nvidia’s total revenue in the first quarter. All eyes will be on this number in the second quarter report, as Nvidia’s data center graphics processing units (GPUs) are critical to the development of artificial intelligence. According to Wall Street, revenue could be anywhere between $24.5 billion and $25.2 billion – any result above that range is likely to spark a new wave of enthusiasm for Nvidia stock.
Tech giants like Microsoft, alphabetAnd Meta-platforms (to name a few) have committed to spending tens of billions of dollars on their AI data center infrastructure this year, and a significant portion of that money will flow directly to Nvidia through the sale of GPUs.
That includes sales of the H100 GPU, which set the benchmark for the industry last year, and the newer H200, which can run AI inference twice as fast as its predecessor. But there’s also a whole new generation of chips on the way.
Expect an update on Nvidia’s new Blackwell chips
Earlier this year, Nvidia announced a new GPU architecture called Blackwell. It is designed for trillion-parameter large language models (LLMs), which until now have only been developed by leading AI companies such as OpenAI.
Blackwell-based GPUs will have significantly higher performance than their predecessors and, according to Nvidia, will also be significantly more energy efficient. The new DGX B200 system, for example, combines eight Blackwell B200 GPUs and can train AI models three times faster. It performs AI inference 15 times faster than the older DGX H100 system.
Nvidia CEO Jensen Huang says B200 GPUs will cost between $30,000 and $40,000, which is about what many customers paid for their H100 GPUs. In other words, given the significant performance benefits, Blackwell will make it far more cost-effective for companies to access and deploy the most advanced AI models.
According to comments by Huang in May, Nvidia was supposed to start shipping Blackwell GPUs to customers in the second quarter, with sales increasing throughout the year. A recent report by The information suggests that a three-month delay could be due to a technical problem with the next-generation chips.
Nvidia has not confirmed these rumored delays, but investors should pay close attention to comments on Blackwell’s second-quarter revenue and any updates to its guidance for the remainder of fiscal 2025. Huang had previously said he expects “a lot” of Blackwell revenue this year, so any deviation from the company’s schedule could significantly impact future financial results.
This is how Nvidia shares could react
Nvidia stock has risen 765% since early 2023, when the AI boom really took off. The company is now worth $3.1 trillion, so even a small move in its stock can add billions of dollars to its valuation.
While a stock’s performance on any given day is often a matter of ambiguity, Nvidia reported its first-quarter results after the market closed on May 22, and its stock rose 9.3% the following day. Keep in mind that the company beat its revenue forecast by $2 billion back then, so it’s possible that a similar result could lead to a similar increase in the stock price this time around.
However, Nvidia stock is currently trading 7% below its all-time high following a sharp market correction earlier this month. If the company delivers weaker-than-expected results, the price could fall significantly further.
However, for investors with a multi-year investment horizon, Nvidia shares currently appear cheap. Wall Street expects the company to generate earnings per share of $0.64 in the second quarter, which would increase the trailing 12-month earnings to $2.17. This puts the stock’s price-to-earnings (P/E) ratio at 58.3.
Although this is almost twice as expensive as the Nasdaq-100 Index, which trades at a P/E ratio of 32, the picture is quite different when you look further ahead. Analysts forecast Nvidia to generate earnings per share of $3.81 in fiscal 2026, giving the stock a more reasonable P/E ratio of 33.2.
In other words, as long as Nvidia’s Q2 report doesn’t come with a negative surprise, the stock seems to be a good value at the current price for investors who can hold the course for at least the next few years.
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Nvidia’s big day is here: What to expect when the AI giant reports earnings after the market close was originally published by The Motley Fool
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