NVIDIA (NVDA) Earnings Preview: hot chip manufacturers must post the results of the essence

Investing Tips

Investors expect big things from Nvidia company (NVDA, $ 212.03), after the chip maker late Thursday reported third quarter results of graphics. While taking into Nvidia’s share price has more than tripled in the past year, it had better not disappoint.

Since the beginning of 2016 thanks to the explosive growth of artificial intelligence Nvidia has been doing well. It turned out that the company’s graphics chip is not only a great PC games. They also run the entire data center and cloud computing have technologies such as autonomous vehicles place.

For example, Nvidia’s data center operations more than doubled compared to the same period last year, the second quarter of this year. The NVDA shares have been chipmaker in early October after a bumpy nnounced aimed at the highest levels of self-driving a new drive PX Pegasus artificial intelligence chip. The company said chip Pegasus “approximately the size of the license plate” and “alternative in today’s entire trunk full five independent computing device prototype used.”

In the past two years, the expansion of these applications NVDA has sent the stock up nearly 650%. Oh, the stock has more than doubled, only in 2017.

Nvidia company has been the world’s largest PC manufacturers ages graphics processing unit (GPU), but the rise of cloud-based computing and other applications that lit a fire under the Share. When the primary client list reads like a who’s who of technology giants – letter (GOOGL), Facebook (FB), Microsoft (MSFT) and Amazon (AMZN) all rely on NVIDIA graphics cards in their data center – you can understand why the market is so high in the name of

In fact, the success of the company in fact has forced former rivals to each other’s arms 

In a bid to Nvidia Corporation, Advanced Micro Devices (AMD) and Intel (INTC) announced a partnership to compete Monday, November 6, in order to build a laptop chip, a combination of Intel processors and AMD graphics unit. This is done to catch up specifically for the game handles complex graphics, this is an area of ​​growing laptop.

Wall Street Nvidia’s incoming

Performance bearish responsibility of graphics chip maker Nvidia provides perfect results every time posts.

A shares this hot when the company failed to meet or exceed analysts’ EXPE can stumble ctations. Consider Nvidia’s stock quickly fell in August this year, although profit and revenue beat expectations. The company’s crime? Increased revenue more than doubled the data center and the 19.3% rate of growth of the automotive business – the result is still below Wall Street’s lofty bar

Lucky Nvidia’s shareholders, expected in the third quarter will not be too tough, I’m satisfied. Consensus forecast earnings growth of 13%, to 94 cents per share, 17.9% revenue growth to $ 2.36 billion. These are strong rate of expansion, to be sure, but fall and set the pace of Nvidia’s next two quarters ago.

Analysts may not have set the bar particularly high in the third quarter, but long-term, they expect great things from Nvidia. They forecast revenue jump 30 percent in fiscal year 2018, according to Thomas Reuters data. The average annual earnings growth of 13% a year hanging in the next five years.

Market is so excited about Nvidia’s growth prospects, Wall Street analysts have a hard time keeping up.

SunTrust Robinson Humphrey analyst William Stein raised its rating on the stock to “buy”, back in July of Nvidia expected upside in most businesses. Then, he released another note on foot early October his target price NVDA $ 200, its shares eclipsed in a few weeks.

In several business growth behind it in, it’s reasonable expectation of another good quarter from chip giant.

“We expect the company to benefit from the growing strength of artificial intelligence (AI) space,” said an equity research analyst in the Zacks. “In addition, to maintain a good position and high-end gaming notebook GPU strength along its innovative product line.”

Nvidia company never cheap stocks, long-term growth of 13% in the 53 times price-earnings ratio on the long transaction prediction As described above, according to Thomson Reuters fromdata. As the stretch as an invitation to a valuation, at any callback, but rustic earnings.

Whether Nvidia, it can be seen the remains closed, but a stumble seems unlikely. More importantly, it does not necessarily change or bullish bigger picture.