NVIDIA earnings preview II NVIDIA earnings preview II NVIDIA earnings preview II

NVIDIA earnings preview II

Junvum Kim

Sales Trader

Summary:  NVIDIA (NVDA) reports 2Q earnings tomorrow morning after US market closes. NVDA seems to carry these type of premiums: AI hype, FOMO, bubble, crowdedness, growth, stocktwits, momentum & line of least resistance.

All eyes on NVDA reporting tomorrow morning (should listen to earnings call at 5am) and it has been 3 months since writing 1Q earnings attached.  NVDA seems to carry these type of premiums: AI hype, FOMO, bubble, crowdedness, growth, stocktwits, momentum & line of least resistance.  Equity risk premium of NVDA is the same as TSLA at 9.3% (vs credit spread at 4.4%) but its implied volatility is three times bigger heading into earnings.  NVDA’s coronavirus closing low on 16 March 2020 coincides with VIX’s top 82.69 and bitcoin’s 4,904 so correlation is there notwithstanding recent divergence with NVDA stock price comeback buy the rumour type of rally as it at one stage hit fresh record high $481.87 last night before it retraced down and some of the outrageous out of the money calls seem to have unwound given surging volatilities.  The stock price literally tripled this year which makes it second strongest since its quadruple return back in 2001. 

IMO based on above and mid PE ratio 98 times (between trailing 149 and forward 47) in the middle of current risk free rate of 4.3% or 23 times, a risk averse person would rather sell some prior (passive move) – already seen by last night’s price action of selling into close - or wait to buy post earnings regardless of the reaction even if it gaps up again tomorrow in postmarket to catch the tail of the comet as buying high isn’t a cardinal sin compared to selling low.  BTW risk reversal displays high demand on 15 delta ($533.61) and 10 delta calls ($556.88).  Also free cash flow estimates are wide open across analysts with lowest at $579m vs highest at $6.4b.


Macro backdrop

  • Inflationary vs disinflationary – neither extremes seem to be present nor likely with Fed balance sheet (liquidity) still at $8.1t while declining
  • Deflation vs reflation – reflation more realistic indicated by 2y inflation expectations look to bottom out and 2y real yield above 3% embedding some output with unemployment rate still pretty solid.
  • GS Financial condition index nearing 100 indicating tightness and its correlation to S&P500 is -0.9 on weekly data over last two years


  • Revenue estimate $11.04 billion (Bloomberg Consensus)
    • Data center revenue estimate $7.98 billion
    • Gaming revenue estimate $2.38 billion
    • Professional Visualization revenue estimate $318.7 million
    • Automotive revenue estimate $309.4 million
  • Adjusted gross margin estimate 70.1%
  • R&D expenses estimate $2.05 billion
  • Adjusted operating expenses estimate $1.91 billion
  • Adjusted operating income estimate $5.89 billion
  • Adjusted EPS estimate $2.07
  • Free cash flow estimate $3.95 billion


  • Revenue estimate $12.51 billion
  • Adjusted gross margin estimate 70.5%
  • Adjusted operating expenses estimate $2.05 billion

2024 YEAR

  • Revenue estimate $43.98 billion

Recent broker consensus target price

  • MS – $500, Wedbush – $490, HSBC - $780, GS - $495, Aletheia Capital - $1,000 (street high), Punto Research - $222 (street low)

Key numbers

  • 52 buys, 6 holds, 1 sell
  • Avg PT $520.85 (12.2% upside from current price)
  • Implied 1-day share move following earnings based on ATM implied volatility expiring 25 Aug: 7.9% equivalent to $35.86 meaning $420.82 downside & $492.54 upside
  • Adjusted EPS beat estimates in 11 of past 12 quarters with 6/8 positive reactions from stock price
  • Shares up 172.5% in past year vs SPX Index up 6.4%
  • Quarter dividend BDVD est. 4.0c per share, year ago reported 4.0c; next declaration date Aug. 23, 2023 – indicated yield 0.04%

Quarterly Outlook 2024 Q3

Sandcastle economics

01 / 05

  • Macro: Sandcastle economics

    Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.

    Read article
  • Bonds: What to do until inflation stabilises

    Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain inflation and evolving monetary policies.

    Read article
  • Equities: Are we blowing bubbles again

    Explore key trends and opportunities in European equities and electrification theme as market dynamics echo 2021's rally.

    Read article
  • FX: Risk-on currencies to surge against havens

    Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperform in Q3 2024.

    Read article
  • Commodities: Energy and grains in focus as metals pause

    Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities in Q3 2024.

    Read article

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.