Nvidia Poised for Q2 Earnings Beat Amid Strong AI Demand
Nvidia remains a significant player in the stock market, though current investor positioning around the $125 mark doesn't seem as crowded as it was during previous quarters. According to Goldman trader John Flood, the current positioning is rated an 8.5 out of 10, slightly less concentrated than before, even as Nvidia's CEO Jensen Huang celebrated a milestone.
JPMorgan's tech expert, Josh Meyers, also notes a similar positioning score of 8 out of 10. Meyers mentions that even before recent market concerns, investors were already diversifying their AI portfolios but remained confident in Nvidia's strong positioning and potential for surprises.
In terms of expectations, JPMorgan predicts Q2 revenue of $29.85 billion, slightly above the consensus, with Data Center revenue projected at $25.52 billion and an EPS of $0.69. The outlook for Q3 suggests even higher revenue.
JPMorgan traders warn of potential stagnation similar to what was seen in the second half of 2023, though they anticipate a $1.2 billion revenue beat could prevent this. The options market is bracing for a significant post-earnings move, with an implied swing of 9.4%, reflecting Nvidia's recent history of volatility after earnings reports.
Goldman Sachs' Toshiya Hari also previewed potential earnings upside, supported by ongoing demand trends, particularly in the Data Center segment, which has consistently exceeded expectations. UBS analyst Tim Arcuri sees further upside driven by strong demand in the data processing and AI server segments.
Lastly, some risk factors to watch include geopolitical events, seasonal trends, and the US election, which could influence market behavior in the coming months.