Nvidia Q3 results preview: assessing blockbuster potential

The equivalent in value terms of every FTSE 350 company reporting at the same time takes place on Wednesday evening when the $3.4 trillion chip giant NVIDIA Corp (NASDAQ:NVDA) posts results.

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The third-quarter figures, which will be revealed after the closing bell, will be another test of the AI growth wave that’s underpinned record years for the S&P 500 index and Nasdaq.

Nvidia has a record of smashing guidance, although in August the figures were not quite as eye-popping as usual to leave the shares down as much as 8% in initial dealings.

Since then, the blockbuster potential of Nvidia’s next-generation artificial intelligence chip Blackwell has helped to put another $20 on the share price at $140. That leaves Nvidia neck-and-neck with Apple Inc (NASDAQ:AAPL) as the world’s most valuable stock market company.

The ascent means shares are up 190% year-to-date as investors look for fresh growth momentum due to the new and more powerful Blackwell platform, which unlocks generative AI for the likes of Microsoft Corp (NASDAQ:MSFT), Meta Platforms Inc Class A (NASDAQ:META) and other firms building AI data centres.

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Chief executive Jensen Huang, pictured above, told CNBC last month that demand has been “insane”.

The new architecture features six technologies for accelerated computing in data processing, engineering simulation, electronic design automation, computer-aided drug design, quantum computing and generative AI — all emerging industry opportunities for Nvidia.

Morgan Stanley, which this month increased its price target from $150 to $160, said in its earnings preview that Blackwell’s upside potential in relation to the current quarter and for the outlook is limited by supply constraints.

It noted the guidance in the company’s last earnings call for several billion of Blackwell revenues in the January quarter, a number the bank expects will be close to $5-6 billion.

Ahead of the results, Morgan Stanley added: “We view this as something of a transitional quarter, and thus not a major catalyst for the stock, but we remain Overweight/Top Pick given expectations that the Blackwell cycle will continue to drive meaningful upside through the second half.”

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Nvidia said in its most recent results presentation that it had seen no slowdown in demand for its existing Hopper family of products.

Huang added at the time that global data centres were “in full throttle” as they look to modernise the entire computing stack with accelerated computing and generative AI.

Revenues for the most recent quarter are forecast to be $33 billion, rising to $36.5 billion in the current period to the end of January. The forecast Q3 earnings per share figure of $0.74 would represent 85% year-on-year growth, and compares with $0.68 in the previous quarter.

Nvidia shares are broadly where they were at the time of the US election, despite the potential for tariffs under a Trump administration to disrupt the supply of Taiwan-made chips.