Nvidia’s Q2 2025 Earnings Preview

Nvidia Corp. (NASDAQ: NVDA) will report fiscal Q2 2025 results on Wednesday, August 28, 2024, after the market close. Here are the key numbers that we’re watching.

Figure 1: Nvidia – consensus expectations for Q2 2025, past earnings surprises, revisions, and CAGR

Source: Visible Alpha consensus (August 20, 2024). “Previous Surprises” indicate the direction that specific line items beat or missed. “Consensus Revisions” show the trajectory of line items from a given date.

Nvidia’s Q2 2025 Earnings Preview

According to Visible Alpha consensus, total revenues of $28.7 billion expected for Fiscal Q2 2025 have not moved much from fiscal Q1 2025 earnings in May. Overall growth continues to be driven by optimism about the strength of Nvidia’s Data Center segment. This segment has seen its expected top-line performance for Q2 increase from a mere $8.8 billion in January 2023 to its current projection of $28.7 billion, up over 3x. This revenue surge has been driven by strong demand for its GPUs from cloud service providers, and the move to accelerated computing in the data centers for AI.

More recently, the Data Center segment’s expected revenues in Q2 edged up slightly higher from $24.7 to $25.0, according to consensus. While the pace of analysts’ upward revisions to the Data Center segment has moderated since the Q4 release in late February, it will be important to see how Nvidia guides the market for Q2 and the rest of FY 2025, and to what extent higher pricing and volumes will be expected to continue. In particular, the outlook for Blackwell will likely be important. It is worth noting that the consensus gross profit for the Data Center segment for FY 2025 has decreased by $3 billion since last quarter, reflecting lower expectations for Q4 2025.

Currently, there is significant debate about the performance of the Data Center segment. Based on Visible Alpha consensus, this business is projected to generate $25.0 billion in revenues in Q2 2025. For FY 2025, Visible Alpha consensus for this segment has increased over $12.0 billion to $105.9 billion since the Q4 2024 release in February. However, the estimates now range from $99.2 billion to $120.8 billion, a significant narrowing from the February range of $65.4 billion to $121.2 billion. The FY 2026 expected Data Center revenue range from $128.8 billion to $215.3 billion remains significant, causing the expected FY 2026 consensus P/E to be 33x and to range from 23x to 45x.

The stock has traded up around 37% since the May release, and is up around 93% since the February release. Could the Q2 release provide the next positive catalyst for the stock or are expectations largely priced in for now?

Figure 2: Nvidia consensus estimates

Source: Visible Alpha consensus (August 20, 2024). Stock price data courtesy of FactSet. Nvidia’s current stock price is as of the market close on August 19, 2024.

Figure 3: Nvidia’s key financial items

Source: Visible Alpha consensus (August 20, 2024). Stock price data courtesy of FactSet. Nvidia’s current stock price is as of the market close on August 19, 2024.