Nvidia will 'clearly beat expectations': Analyst on earnings

Nvidia (NVDA) is set to post its first-quarter earnings for the fiscal 2025 year this Tuesday, May 22. Many on Wall Street will have their eyes set on the chip-making giant since it was the leader of previous rallies seen in the market and may be a signal of what's to come going forward.

Moor Insights & Strategy Founder and CEO Patrick Moorhead joins Morning Brief to give insight into the upcoming earnings and what investors should expect from its potential impacts on the market (^DJI, ^IXIC, ^GSPC).

Moorhead believes Nvidia will outperform expectations: "The company is going to clearly beat expectations on top line and EPS and will likely see a very positive guide. And I base a lot of this analysis on 2 or 3 core things, which is look at demand. Demand is off the rails. What's development risk? Somewhat low because Blackwell is very similar to the previous chip they had. And then there's manufacturing. There could be some risk in manufacturing from TSMC (TSM) and that would be the place to look."

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This post was written by Nicholas Jacobino

Video transcript

All right, let's talk about NVIDIA because it's led the charge once again, this year shares up nearly 87% since January 1st.

So can the chip giant sustain its momentum here to break it all down for us?

We want to bring in Patrick Moorehead, more insights and strategy founder and Ceo Patrick.

I it's great to see you again.

So talk to us just about what you're expecting to hear from NVIDIA this week and whether or not you think it's going to live up to those lofty expectations.

Yeah.

So every quarter, we do this hand wringing process because as you said, in the run up, the stock has actually crushed it uh over the past year and a half here.

So you have to be cautious about when is something going to happen.

And I believe that like we've seen the previous multiple quarters, the company is gonna clearly uh beat expectations on top line uh and eps and will likely see a very positive guide.

And I based a lot of this analysis on, on two or three core things which is look at demand, demand is off the rails.

Uh what's uh development risk somewhat low because it uh Blackwell is very similar to the previous chip they had and then there's manufacturing, it could be some risk in manufacturing uh from TS MC.

And that would be the place to look.

Patrick.

How long can other companies ride the coattails of nvidia's A I.

Demand mentions when they talk about just how much they're anticipated to continue to grow as a result of this newfound perhaps uh well, of, of demand for generative A I, there's gonna be multiple A I uh infrastructure build outs.

And the first one we're seeing is amongst these hyper trailers, right?

The Microsoft, the Googles the Amazons and that has at least another 18 months in it.

Uh And then what we're going to see is it branching out which is to, to businesses and on prem data centers and you're gonna see companies like DEV an IBM and H PE and then you're gonna see this PC wave, which interestingly enough, I I think kicks off this week at the Microsoft build conference and then you're gonna have uh the smartphone, uh A I uh build out.

So there is a lot of room uh in this A I run up just on the infrastructure side, not even talking about the software and services.

Yeah, Patrick, talk to us a little bit more about the software services, the opportunity there.

And then, and just in terms of those lofty expectations, kind of going back to what you started that first answer with what do investors need to understand just about what that growth rate is going to probably look like from here on now, if we do see a bit of a slowdown from those blow it out of the park, this type of numbers that we have certainly seen over the last several quarters.

Yeah.

So, uh, related particularly to NVIDIA, I mean, you're gonna see deep double digit numbers, but for the rest of this build out, we really haven't seen the pop, right.

We saw a little bit of double digit from uh companies like uh a Amazon's Aws, right?

You see uh uh markers like service now that are, that are absolutely crushing it.

But I, I think double digit growth is, is in the cards, worst case for these companies.

You know, it's, it's interesting because going forward from here and especially looking throughout the rest of the year.

A lot of companies who have either implemented plans for generative A I and, and plans to have it increase their workplace productivity or even to give solutions to, to customer, a lot of the central force and focus right now has been around some of the tech companies like, like where even Apple might be able to infuse this into their products as well.

Should customers expect some massive wave of generative A I in consumer devices by this year?

Yeah, the short answer is yes.

Uh, today we're gonna see Microsoft uh talk about uh their A IP CS and what they're doing and how they're supporting it.

Uh We've seen uh Qualcomm get out there and talk about the A I smartphone.

They announced a smartphone chip for that.

We saw Samsung with the S 24 we're gonna see Apple play their card at their WW DC developer conference uh here uh in June and I, I do believe that and I, I'll repeat what I've said on your show and others.

I'm expecting the start of a super cycle in the fourth quarter for these A I devices uh which will inherently have generative A I capabilities.

So, what does that mean then for these stock prices then Patrick, I think they have nothing to do but, but go up, I don't think they're baked in uh particularly when it comes to uh companies like Apple HP uh Dell and, and even uh Lenovo and Samsung.

All right, Patrick Moorhead, who is the more insights and strategy founder, Ceo and chief analyst, Patrick.

Great to kick off the day with you.

Thanks so much for taking the time.

Thank you.

Absolutely.