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Artificial intelligence giant Nvidia (NASDAQ:NVDA) is scheduled to report its third-quarter earnings on Tuesday, November 21st, after market close.
Analysts expect the Santa Clara, California-based company to post earnings per share of $3.39 on revenues of $16.11 billion for the quarter, which would mark a significant jump of 172%.
The AI leader is once again expected to smash third-quarter revenue expectations, as it continues to benefit from broadening AI adoption across industries. But observers will be focusing on the sustainability of this growth due to expanding U.S. curbs on sales of high-end chips to China.
Nvidia’s shares have surged over 247% YTD, helping it become the first trillion-dollar chip firm. The Philadelphia semiconductor index has jumped nearly 50%.
According to investment firm Citi, “Going into earnings, we believe investors are focused on: the US restrictions of AI chips to China and its impact on NVDA’s data center sales outlook in [fiscal 2025 and 2026],” among other things.
In October, the U.S. brought in new updates to its export restrictions which curbed the sale of chips that Nvidia (NVDA) made for the Chinese market, such as the A800 and H800 chips, as part of Washington’s efforts aimed at hindering China’s access to advanced semiconductor technology.
Nvidia has said that it does not expect a near-term meaningful impact on its financial results. The Wall Street Journal reported that the latest U.S. export restrictions on high-end chips could put $5B worth of orders at risk.
The company is expected to announce three new chips for China, according to a Reuters report citing local news outlet STAR Market Daily.
Nvidia has held over 90% share of China’s $7 billion AI chip market, however, analysts noted that the U.S. restrictions may benefit local players such as Huawei Technologies.
Earlier this week, Nvidia announced its new H200 GPU, which allows for work done on generative AI and large language models to be even faster. It added that Amazon (AMZN), Google (GOOG) (GOOGL) and Oracle (ORCL) will be among the first cloud service providers to deploy H200, starting next year.
Seeking Alpha analysts at large consider Nvidia a Hold. This compares with average Wall Street rating of Strong Buy and SA Quant rating of Hold.
