NVDA

NVIDIA Corporation

172.64
USD
-2.50%
172.64
USD
-2.50%
135.43 346.47
52 weeks
52 weeks

Mkt Cap 431.60B

Shares Out 2.50B

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Nvidia Earnings: What to Watch on Feb. 16

Nvidia (NASDAQ: NVDA) is slated to report its fourth-quarter and full-year results for fiscal 2022 (essentially the November 2021 through January 2022 period) after the market close on Wednesday, Feb. 16. An analyst conference call is scheduled for the same day at 5:30 p.m. ET. Investors in the graphics chip specialist will probably be approaching the report with optimism. The company has beaten Wall Street's consensus earnings estimate in at least the past six consecutive quarters. In addition, investors will be eager to hear what management has to say on the earnings call about the Omniverse, which is Nvidia's platform for enabling companies to build out their metaverses. Investors shouldn't be concerned if management shares that the company is abandoning its attempt to acquire leading mobile-chip designer Arm, owned by Japan's SoftBank. On Jan. 25, news reports began rolling out saying that Nvidia is poised to give up pursuing this proposed deal, which has run into brisk regulatory headwinds. Nvidia doesn't need Arm for the company and its stock to continue to be long-term winners, as I've been writing for a couple of quarters. Nvidia stock has returned 69.6% over the one-year period through Jan. 26, easily outpacing the S&P 500's return of 14.5% over this period. Here's what to watch in the company's upcoming report. Nvidia's key quarterly numbers Here are benchmarks to use to gauge the tech company's results. Data sources: Nvidia and Yahoo! Finance. Fiscal Q4 2022 essentially corresponds with the November 2021 through January 2022 period. *Adjusted to reflect 4-for-1 stock split in July 2021, which increased share count by a factor of four. **Calculated by the author based on the metrics for which management provides guidance. For context, in fiscal Q3, Nvidia's revenue jumped 50% year over year (and 9% sequentially) to a record $7.10 billion. Growth was driven by record revenue in the gaming, data center, and professional visualization platforms. EPS on the basis of generally accepted accounting principles (GAAP) soared 83% year over year to $0.97, and adjusted EPS surged 60% to $1.17. Wall Street had been looking for fiscal Q3 revenue and adjusted EPS of $6.82 billion and $1.11, respectively, so Nvidia surpassed both expectations. Platform performance Here's how the platforms performed last quarter: Platform Fiscal Q3 2022 Revenue Change (YOY) Change (QOQ) Gaming $3.22 billion 42% 5% Data center $2.94 billion 55% 24% Professional visualization $577 million 144% 11% Automotive $135 million 8% (11%) OEM and other $234 million 21% (43%) Total $7.10 billion 50% 9% Data source: Nvidia. OEM = original equipment manufacturer; not a target market platform. YOY = year over year. QOQ = quarter over quarter. As always, investors should focus on the two largest platforms. Nvidia's overall results are driven by results in its gaming and data center businesses. In the first, second, and third quarters of fiscal 2022, these two platforms together accounted for 85%, 83%, and 87%, respectively, of the company's total revenue. Don't sweat the results of the OEM and other category In recent quarters, a contributor to Nvidia's OEM category has been sales of its cryptocurrency mining processor (CMP), which launched in early calendar year 2021. Reiterating what I wrote in last quarter's earnings preview, investors shouldn't pay much attention to results in OEM and other because this category's sales can be expected to fluctuate considerably due to the extreme volatility in the cryptocurrency market. Putting some numbers next to the prior statement, last quarter, sales of the CMP added $105 million to Nvidia's coffers, down from $266 million in the prior quarter. And on last quarter's earnings call, CFO Colette Kress said, "We also expect our CMP product to decline quarter-on-quarter to very negligible levels in Q4." But pay attention to the discussion about the metaverse Nvidia's quarterly earnings calls (and its earnings releases, for that matter) put those of most other companies to shame, so I highly recommend that investors listen to these calls. It's a sure thing that the top management team will discuss the Omniverse, Nvidia's platform for enabling companies to build their metaverses. Guidance Management's guidance, relative to Wall Street's expectations, will likely be the biggest factor in the market's reaction to Nvidia's upcoming report. So investors should know that for the first quarter of fiscal 2023 (essentially the February to April 2022 period), analysts are currently modeling for adjusted EPS of $1.17 on revenue of $7.28 billion, representing year-over-year growth of 29% and 29%, respectively. 10 stocks we like better than Nvidia When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Nvidia wasn't one of them! That's right -- they think these 10 stocks are even better buys. *Stock Advisor returns as of January 10, 2022 Beth McKenna owns Nvidia. The Motley Fool owns and recommends Nvidia and SoftBank Group Corp. The Motley Fool recommends Softbank Group. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

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