Nvidia is set to disclose its fiscal fourth-quarter earnings after the bell on Wednesday, providing Wall Street with insights on the longevity of the AI boom. According to LSEG, formerly Refinitiv, consensus estimates, analysts are expecting earnings per share of $4.64 (adjusted) and revenue of $20.62 billion. The company has been riding high on the AI wave, being the primary beneficiary of the tech industry’s infatuation with large artificial intelligence models developed on its high-priced graphics processors for servers. The stock price of Nvidia has surged almost fivefold since the end of 2022, propelling its market value to $1.72 trillion, momentarily surpassing tech behemoths Amazon and Alphabet.

Analysts project a staggering 240% increase in revenue, totaling $20.6 billion, driven primarily by $17.06 billion in data center revenue. This segment focuses on selling AI GPUs like the H100, catering to tech giants such as Microsoft, Amazon, Meta, and Google. Net income is expected to soar over sevenfold to $10.5 billion in the January quarter. However, concerns linger regarding the sustainability of Nvidia’s growth, with indications that major tech companies may scale down their GPU purchases if the demand subsides post the current hype cycle.

Nvidia has plans to roll out its new highest-end server GPU, the B100, in 2024, a move that could influence its growth trajectory. Despite having diversified businesses, including chips for PC gaming and automotive chips, the spotlight during the earnings announcement will undoubtedly be on its AI GPUs. These products account for over 80% of Nvidia’s sales, making the data center GPU numbers a pivotal metric to watch. Analysts are keen on the company’s commentary on the broader market adoption of AI technology.

Nvidia’s fourth-quarter earnings report will offer valuable insights into the company’s standing in the AI market and its growth prospects. With high expectations from investors and the overarching question of how long the current momentum can last, Nvidia’s performance and guidance will be scrutinized closely. The industry will be watching CEO Jensen Huang’s remarks closely for hints on the future outlook and the company’s strategy to navigate potential shifts in demand. As Nvidia charts its course in the ever-evolving tech landscape, adaptability and innovation will be key to sustaining its position as a leader in the AI industry.

Earnings

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