Benchmark Nvidia earnings will play a pivotal role in the ongoing AI story and could shed light on where the volatile market is headed going forward. “At the end of the day, it's all about NVDA,” Strategas' Ryan Grabinski said in a recent client note. “The near-term market direction seems entirely dependent on this company.” Wall Street has come to view Nvidia as a barometer for the broader semiconductor and AI industries. The company reigns as the dominant and most advanced artificial intelligence chipmaker, supplying the likes of Amazon, Alphabet and Microsoft. Nvidia shares have risen 159% year-to-date. NVDA Stocks on a mountain YTD Investors are widely expecting the chip giant to beat expectations when it reports earnings after the close on Wednesday. LSEG is currently expecting earnings of 64 cents per share and revenue of $28.7 billion. The company's earnings outlook, which typically influences aftermarket stock movements, remains closely watched. But the company's Blackwell chips also remain in focus following a report from The Information earlier this month about delays to the company's next-generation AI chips. Investors appeared to shrug off those concerns following the report, sending the stock up nearly 14% last month. But concerns about the return on hyperscalers' AI investments are starting to grow as investors eagerly search for signs of a continued surge in demand. “Right now, it's perfectly priced and everyone's waiting to see if the Blackwell chips will be delivered on time,” Ray Wang, principal analyst and founder at Constellation Research, said on CNBC's “Squawk Box” on Tuesday. “It's all focused on earnings expectations.” Strong guidance for the October quarter would signal continued AI demand and ease concerns that spending on infrastructure buildouts has peaked. Analysts surveyed by LSEG expect third-quarter sales of $31.7 billion, up 75% from a year ago. That would be a sign of a slowdown from the 112.5% year-over-year increase expected for the current quarter. UBS analyst Timothy Arcuri suggests estimates of this so-called whisper figure are now between $33 billion and $34 billion. That's up from a previous forecast of $31.7 billion and a consensus estimate of $31.6 billion, Arcuri noted. Blackwell Concerns Nvidia shares fell last month on reports that the company was experiencing delays in production of its latest graphics processing unit ecosystem, called Blackwell. Those losses were inflated as a global sell-off depressed risk appetite across the sector. But many on Wall Street believe Nvidia has overcome its recent worries, with the stock up 13% last month and 9% since the start of August. “Nvidia shares are largely ignoring concerns about potential Blackwell delays, which is the right view, with near-term business looking strong and Blackwell set to ramp up production again this year in line with initial guidance,” Morgan Stanley's Joseph Moore wrote. The analyst expects some increase in Blackwell's production in October, followed by a “more substantial ramp” in the January quarter. Loop Capital's Ananda Baruah added that Hopper's production increase could outpace Blackwell's, but the company didn't expect a “significant ramp” until July 2025. Evercore ISI's Mark Lipacis said Blackwell's concerns are “overdone,” adding that the company has a good track record of bouncing back even when negative news leads to a 5-10% sell-off. “Furthermore, if delays materialize, current-generation Hopper solutions will be bought even if Blackwell is pushed out, as Tier 2 and Tier 3 (cloud computing solutions) and enterprise demand is so strong,” he added. Earlier this month, HSBC's Frank Li raised his price target on the company to $145 a share from $135, noting that the production changes are unlikely to impact the outlook for the second half of fiscal 2026. Goldman Sachs analyst Toshiya Hari reiterated his buy recommendation. “While the reported Blackwell delays may cause some fundamental volatility in the near term, we expect management commentary in the coming weeks coupled with supply chain data points to increase confidence in NVIDIA's earnings potential in fiscal 2025,” he wrote. Meanwhile, Susquehanna's Christopher Rowland believes recent supply chain comments from partners such as Supermicro Computers could have a positive impact on NVIDIA's GPU demand growth. “We believe improved supply and availability of Hopper GPUs (H100/H200) will help fill the void in the near term,” he wrote.
