Nvidia Earnings Will Gauge Strength of AI Boom

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ChatGPT and similar language-generation systems made by Google, Microsoft and others. Nvidia has invested in making chips and software for AI for more than a decade and has no competitors who can yet match it. In May, the company said it expected revenue to be around $11 billion for its fiscal second quarter, almost $4 billion more than Wall Street expected.

Its shares rose 24% the following day, adding almost $184 billion to its market value and eventually propelling the company’s market value above $1 trillion. This year through Tuesday’s close, Nvidia’s stock has more than tripled, and investors in the options markets have been betting heavily that the shares will rise further after Wednesday’s results. By the numbers • Nvidia is expected to report revenue of $11.19 billion for its latest quarter, up 67% from a year earlier, according to an average of analysts surveyed by FactSet.

That would be slightly better than the company’s guidance, but within its range of 2% above or below $11 billion. It would be a record amount for the company. • Analysts expect profit to be $4.73 billion, compared with $656 million in the year-ago period.

Nvidia doesn’t give its own profit expectations. What else to look for • How the current quarter is evolving. Analysts and investors will be paying close attention to the company’s outlook as an indication of the pace of the AI arms race that has Nvidia at the center.

Currently, analysts forecast revenue of $12.59 billion for its third quarter ending in October. • Nvidia’s supply chain. The company relies largely on Taiwan Semiconductor Manufacturing to produce the chips it designs, leaving it susceptible to a slowdown if that company doesn’t expand production rapidly enough.