Nvidia, Dell, and Snowflake: Post-Earnings Summary

Nvidia’s Fiscal Q3 2025 Earnings

Nvidia (NASDAQ: NVDA) delivered total revenues for Q3 of $35.1 billion, beating Visible Alpha’s consensus estimate of $33.3 billion by $1.8 billion. This was driven by continued revenue growth in Nvidia’s Data Center segment, which saw its Q3 revenue surge to $30.8 billion, $1.5 billion ahead of the $29.3 billion consensus estimate coming into the quarter and capturing most of the beat to expectations.

This revenue surge has continued to be driven by strong demand for Hopper GPUs, particularly from cloud service providers. Blackwell demand is “staggering” with demand greatly exceeding supply. Management noted that they are on track to exceed their previous Blackwell revenue estimate of several billion dollars as visibility into supply continues to increase.

However, the Data Center segment’s non-GAAP gross margin dipped to 77.8% in Q3, slightly below consensus of 78.3%. This muted the magnitude of the surprise to the EPS line with non-GAAP diluted EPS of $.81/share, exceeding the consensus of $.75.

Nvidia Estimate Revision Trends

Source: Visible Alpha consensus (December 11, 2024). Stock price data courtesy of S&P. Nvidia’s current stock price is as of the market close on December 10, 2024.

The Outlook: Concerns about Blackwell’s Ramp and Gross Margin

For fiscal Q3 2025, Nvidia guided nearly $1 billion ahead of expectations to $37.5 billion in total revenue, with analysts now projecting the Data Center segment to make up $34.1 billion, up from $32.5 billion.

However, according to management, as Blackwell ramps, gross margins are expected to moderate to the low 70s. When fully ramped, the Company expects Blackwell margins to be in the mid-70s. However, there are questions about the timing of Blackwell’s ramp and how that will be reflected in the quarters.

This commentary in the earnings call led to a 100 bps decline in gross margins for both FY 2026 and FY 2027. Sentiment seems to be a bit more cautious on the magnitude of the earnings impact from Blackwell. It is worth noting that the timing of the Blackwell ramp will be a critical dimension to the investment thesis. There continues to be debate among analysts about the quarterly pace and timing of the B-series and GB-series ramps and how much the long-term expected growth is projected to add to revenues in FY 2026 and FY 2027.

According to Visible Alpha consensus, Data Center revenues for FY 2026 are now expected to be $183.8 billion, up from $179.8 billion on November 20, 2024, with consensus EPS increasing to $4.46/share, up only $.05/share, due to the margin shift.

Nvidia Consensus Estimates

Source: Visible Alpha consensus (December 11, 2024). Stock price data courtesy of S&P. Nvidia’s current stock price is as of the market close on December 10, 2024.

Dell’s Fiscal Q3 2025 Earnings

Dell (NYSE: DELL) delivered total revenues for Q3 of $24.4 billion, slightly missing Visible Alpha’s consensus estimate of $24.7 billion by $0.3 billion. The Infrastructure Solutions Group (ISG) segment saw its Q3 revenue come in at $11.4 billion, in line with the consensus estimate coming into the quarter. This segment was driven by a 58% increase in Servers and Networking. However, this was slightly below the level that was expected. In addition, Storage increased 4%, slightly ahead of expectations.

The company delivered a respectable AI server backlog of $4.5 billion in Q3. In Q3, the company shipped $2.9 billion of AI servers. The company noted on the Q3 call that it saw a shift of the orders moving towards the Blackwell design, the GB200, and this is now on backlog.

The ISG segment’s non-GAAP gross margin came in at 33.8% in Q3, in line with expectations and down from 37.3% in Q3 2023. Despite this decline in gross margin, the ISG operating profit margin came in at 13%, ahead of the 12% expected. In addition, Dell expects the ISG operating margin to continue to improve in Q4.

Revisions of Dell Estimates

Source: Visible Alpha consensus (December 11, 2024). Stock price data courtesy of S&P. Dell’s current stock price is as of the market close on December 10, 2024.

The Outlook: Below Expectations

Near-term Growth

For fiscal Q4 2025, Dell guided to $24.0-25.0 billion in total revenue, slightly below pre-Q expectations of $25.7 billion. The ISG segment revenue is projected to make up $11.8 billion, and to see its margin improve quarter over quarter from 13% to 15%. The ISG consensus margin for Q4 is expected to be 15.0%, up from 14.0% in Q3.

Long-term Outlook

Consensus for Dell’s FY 2025 revenues dropped to $96.1 billion from $97.7 billion, below what was expected by analysts ahead of Q3. However, ISG’s margins are trending better. Currently, Visible Alpha consensus is projecting ISG’s operating profit margin to jump from 8% in Q1 this fiscal year to 15% in Q4 and to 12% by the end of fiscal year 2025.

Looking further out, analysts remain bullish on the demand for AI servers. Based on six sources, analysts expect to see AI server revenue generate $10.5 billion in FY 2025 and to expand to $17.5 billion in revenue, an increase from the previous $13.8 billion estimate for FY 2026. ISG revenue is expected to grow to $51.7 billion in FY 2026, with nearly all of the year-over-year increase coming from the AI servers. ISG profitability is expected to hit 12.0% operating profit margin this year and to remain there for FY 2026. How long will it take to return to the previous 13% levels?

According to Visible Alpha consensus, EPS is expected to grow nearly 20% from $7.82/share in FY 2025 to $9.38/share in FY 2026. Estimates range from $8.30/share to $10.50/share and have widened, putting the FY 2026 P/E consensus at 12x, and in the 11x-14x range, up from 11x-13x.

DELL stock has traded down around 17.6% since last quarter’s November earnings release. Will the ramp in AI servers continue? Will ISG’s profitability return to beat expectations and be a catalyst in H1 2026?

Dell Consensus Estimates

Source: Visible Alpha consensus (December 11, 2024). Stock price data courtesy of S&P. Dell’s current stock price is as of the market close on December 10, 2024.

Snowflake Q3 2025 Earnings and Outlook Beat Expectations

According to Visible Alpha consensus, Snowflake’s (NYSE: SNOW) total revenues of $900 million and operating income of $59 million beat consensus expectations in Q3 2025. Operating profit expectations for the Q4 have moved up more than 20% from $34 million in November to now $42 million. However, these estimates are still significantly lower than the initial estimate of $102 million in January 2024. Operating profit expectations for FY 2025, FY 2026, and FY 2027 have all moved up since the release. Overall growth continues to be driven by the strength of Snowflake’s data platform, the potential network effects of moving more data there, and the promising outlook for their new AI-related products.

Currently, there is debate about gross margin performance. Based on Visible Alpha consensus, the non-GAAP gross margin estimates range from 73% to 81% for Q4 2025. For FY 2025, Visible Alpha consensus for gross margin has moved up to 76% from 75% last quarter, and is expected to remain at the 76% level over the next few years. It is still below the 77% previously expected for FY 2025 and FY 2026 at the beginning of the year, but consensus may have now settled at the correct level of 76%.

The stock has been a significant underperformer this year, but surged 32.9% since the November quarter’s release. Could the Q4 release provide more visibility into FY 2025 and lead to another positive catalyst for the stock?

Snowflake Revisions

Source: Visible Alpha consensus (December 11, 2024). Stock price data courtesy of S&P. Snowflake’s current stock price is as of the market close on December 10, 2024.