Nvidia’s Earnings Are Hours Away. Here’s What to Expect.

Everybody is talking about Nvidia—and some investors are getting worried. Later today, Nvidia reports results in what’s likely to be the most closely watched report in the company’s three decade history.

With the chip maker’s shares up nearly 50% this year, expectations are certainly high.

Wall Street analysts expect Nvidia to report January quarter revenue of $20.4 billion—up nearly 240% year over year—with adjusted earnings per share of $4.59.

Nvidia’s outlook for the current quarter will be just as closely watched. Analysts currently estimate April quarter revenue of $22.2 billion with earnings per share of $5.02. That would represent growth of up 208% and up 361%, respectively, from a year ago.

Let’s state the obvious. Nvidia’s stock price isn’t going to rise 50% every two months. That’s not sustainable. The chip maker dominates the market for data center AI chips, but there will be fits and starts around this major shift toward AI computing. Nothing goes straight up to the right.

“AI hype is everywhere and we need to be measured on our expectations. We are still in the early innings,” Dell Chief Operating Officer Jeff Clarke said last year. “Experience over multiple technology cycles tells us that progress won’t always be linear, but we are excited about the opportunity in front of us.”

That said, investors shouldn’t understate the enormous multi-year opportunity ahead of Nvidia. Last December, I wrote that the chip maker was one of a handful of companies best positioned to take advantage of the AI infrastructure buildout. I still believe that to be the case.

We also know a couple of important things. First, demand for Nvidia’s AI chips remains robust. “The single greatest challenge in AI, of course, is scaling the capacity of AI. We are very severely supply-constrained,” Nvidia CEO Jensen Huang told reporters in Taiwan last month. “Last year was the beginning. This year is going to be a huge year.”

To the degree, the numbers are disappointing today it will likely be because of supply constraints. That’s not a long-term negative—eventually supply will come on line.

Nvidia’s next major next-generation AI chip, the B100, will likely drive another wave of demand when it comes out in the coming quarters. The “upcoming Blackwell architecture will drive another step up in performance, while ASPs [pricing] will increase as well,” Baird analyst Tristan Gerra wrote on Tuesday.

It’s possible some customers decide to wait for the B100, creating a short-term lull in Nvidia’s results, but that’s still demand that will eventually convert to Nvidia revenue.

So, here’s the playbook given the circumstances: With the recent big rally in Nvidia’s stock, it could drop on strong numbers or trade higher. Frankly, it’s unpredictable. No one can predict every 10% up or down move in a stock.

Instead of trying to predict the instant reaction to the numbers, it may be wiser to react to the volatility afterwards. If there is a significant selloff, buy more. If the stock takes off, pare back the position. Investors are better served to ignore short-term noise and focus on Nvidia’s potential.