Nvidia is set to report its second quarter earnings this week. Investors have waited for this report all quarter, since it often sets the tone for the broader AI trade.
Nvidia's earnings come later than usual. Big Tech companies like Microsoft, Amazon, and Google already shared their results nearly a month ago.
The report also lands at a tricky time for chip stocks. Shares across the sector have struggled to hold onto gains over the past month.
That struggle follows steep declines in July. Investors grew worried about whether companies would see real returns on their heavy AI spending.
What Analysts Expect From Nvidia
Microsoft, Amazon, and Google helped calm some of those worries. Their cloud businesses posted strong growth numbers in recent reports.
Still, Google and Meta raised concern among investors. Both companies signaled they plan to increase spending going forward.
For the quarter, analysts expect Nvidia to post adjusted earnings per share of $2.09. Revenue is expected to reach $92 billion, according to Bloomberg consensus estimates.
That would mark a 96% jump in revenue compared to the same quarter last year. It would also mark a continued acceleration from the previous quarter.
Nvidia changed how it reports revenue last quarter. The company now splits Data Center revenue into sales to Hyperscalers and AI Clouds, Industrial, and Enterprise.
The company folded its PC, game console, workstation, robotics, and automotive revenue into a new Edge Computing segment.
Data Center Growth and Future Risks
Data Center revenue is expected to top $85.4 billion. That would be a 107% increase from last year.
Hyperscaler revenue is projected to reach $43.5 billion. Sales tied to AI Clouds, Industrial, and Enterprise are expected to hit $41.7 billion.
Nvidia still gets most of its revenue from hyperscalers such as Amazon, Google, and Microsoft. Each of those companies builds its own chips to cut reliance on Nvidia.
Some of those companies also sell chips to outside customers. That trend could create a challenge for Nvidia down the road.
Nvidia has kept signing deals across the AI industry. Earlier this month, the company said it is working with BlackRock, Blackstone, KKR, Apollo, Brookfield, and Goldman Sachs.
Together, those firms plan to build a $500 billion pool of capital. The plan would help securitize Nvidia's graphics processing units.
Nvidia is also backing a large data center project. The company said it will support SB Energy and OpenAI on an 8-gigawatt data center in Ohio, with funding up to $150 billion.
