3 months ago • 1 min
Nvidia’s future could be immense, that’s for sure. Investment bank Goldman Sachs reckons that artificial intelligence alone could be a $316 billion market opportunity between now and 2026. And while Nvidia won’t win all of that, even a chunk of that bounty would dwarf the firm’s $27 billion total revenue from last year.
But right now, those figures are a bit of a guess. To keep the AI hype buzzing, Nvidia needs to live up to its own very high expectation of $11 billion in revenue for its second quarter. That’s around 50% more than Wall Street analysts were predicting before the firm dropped its first-quarter earnings, and the announcement brought about a 25% stock price hoist immediately after. Naturally, costs and margins matter too – but right now, that $11 billion forecast is all that really counts for investors.
Now, I’m not saying it’s as simple as a winning revenue result automatically triggering a rally, or vice versa. But a “blowout” revenue number of, say, $13 billion or more, and you could tell Alexa to start blaring Katy Perry's “Fireworks”. You can also imagine that if Nvidia misses that $11 billion mark for its second quarter, while saying its third quarter (which ends in October) looks even better, Nvidia fans would probably still be satisfied. But the worst outcome would be a major miss on revenue, which could beat up the stock and reset the excitement around AI’s short-term future. And that wouldn’t just affect Nvidia: it’d be a massive blow for all the tech stocks that have pulled the US market higher this year.
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