Earnings Watch: Can NVIDIA keep up its pace? Earnings Watch: Can NVIDIA keep up its pace? Earnings Watch: Can NVIDIA keep up its pace?

Earnings Watch: Can NVIDIA keep up its pace?

Equities 5 minutes to read
Peter Garnry

Chief Investment Strategist

Summary:  In today's Earnings Watch we focus on NIO, Sea Ltd and NVIDIA which are all high growth companies that have been the darlings of investors this year. NIO shares are up 1,733% since the lows in March as investors are betting heavily on EVs and especially the Chinese market. Sea Ltd is the fastest growing gaming and e-commerce company in Southeast Asia and almost doubled its revenue in the previous quarter. NVIDIA is our prime focus as no other company has benefitted as much from the acceleration in technology over the past 10 years. NVIDIA grew revenue 50% y/y in the previous quarter driven by its Data Center segment so expectations are high.

The Q3 earnings season is almost done with 90% of the S&P 500 companies having reported already, but this week there are still some interesting earnings to watch. Today, earnings from Chinese companies such as Baidu, iQIYI and JD.com will be watched closely as China has bounced back from the Covid-19 crisis faster than most countries bolstering investor confidence in the Chinese equity market.

On Wednesday, earnings from the Chinese EV-maker NIO will grab the attention with the stock price up 1,733% since the lows in March as investors are betting heavily on the Chinese EV market and this company is the most pure expression an investor can get. But with Friday’s close the company has hit an enterprise value of $62bn which against expected revenue of $2.3bn in 2020 is a very high valuation, not only in general, but in particularly for a carmaker. On Wednesday, we will also get earnings from Walmart and Home Depot which we expect to deliver strong earnings driven by high disposable income in the US from Covid-19 transfers driving high consumer spending on home improvements and food. Sea Ltd also reports on Wednesday, and this fast growing Singapore-based gaming and e-commerce company saw almost a doubling of its revenue in Q2, so expectations are high going into this earnings release.

Source: Saxo Group

The list below shows all the most important earnings this week.

  • Today:Vodafone Group, Recruit Holdings, KE Holdings, Baidu, iQIYI, JD.com, Palo Alto Networks, Tyson Foods
  • Tuesday: Experian, Fortum, NIO, Walmart, Home Depot, Sea Ltd
  • Wednesday:AP Moller – Maersk, SSE, NVIDIA, Copart, ZTO Express Cayman, Keysight Technologies, Lowe’s Cos, Target, TJX Cos, SQM
  • Thursday:Tokio Marine Holdings, NetEase, Ross Stores, Intuit, Workday, Knorr-Bremse

Can NVIDIA deliver 47% revenue growth?

There has probably not been any other company in the world that has benefitted more from the many converging trends of machine learning, cloud/datacenter, gaming and crypto. All applications go back to the graphics card which is better for many of this high computation tasks. But even more importantly, NVIDIA has managed to build aa eco-system around its graphics cards with its CUDA parallelization platform for fast parallel computing which is essential in many of these tasks. This merge between software and hardware strengthens the business and makes it more difficult for competitors to compete with NVIDIA.

Last quarter FY21 Q2 (ending on 26 July), NVIDIA delivered 50% revenue growth y/y while improving EBITDA margin to 40.9% up from 36.3% in the previous quarter and from 27.1% a year ago underscoring that the company has hit an aggressive scalability point in its operations. The key driver of growth has lately come from its Data Center segment which hit $1.75bn in revenue in the last quarter up from $655mn in FY20 Q2. Given we know that NVIDIA is the biggest provider of graphical cards to the crypto mining industry we are wondering whether the company has moved this estimated (we reason why it is an estimate is that NVIDIA likely do not know exactly the purposes from some of its buyers) business to its Date Center segment so the Gaming segment is now more “clean”. We are guessing that this is the main driver as crypto has heated up again the past year and that NVIDIA’s growth rates in the data center industry are too high versus competitors that something else must be driving the result.

Source: NVIDIA

Finally, analysts will focus on the $40bn acquisition of Arm which is a subsidiary of SoftBank Group and holds some of the most important patents in computer chip design. Many Chinse companies including Huawei have been complaining about the deal and it is still uncertain whether the entire deal can go through or whether the Arm China business will have to be spun out of the deal.

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


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.

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

40 Bank Street, 26th floor
E14 5DA
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992