Nvidia (NASDAQ:NVDA) Q4 Preview: What to Expect?

Chip giant Nvidia (NASDAQ:NVDA) will release its Q4 Fiscal 2024 financial results on February 21. Wall Street analysts are upbeat about NVDA and expect the company to deliver solid financial numbers due to the demand driven by artificial intelligence (AI), especially in its Data Centre business. 

It’s worth noting that most analysts raised their price targets on NVDA stock ahead of the Q4 print. One analyst, Vijay Rakesh of Mizuho Securities, continues to see Nvidia “as the best AI/ML play.” In a note to investors dated February 12, Rakesh said that near-term demand for the company’s chips exceeds supply, indicating strong sales numbers in the upcoming quarter. The analyst raised the Fiscal 2025 and 2026 sales growth estimates for NVDA. Further, he raised the price target to $825 from $625.

NVDA’s Q4 Revenues to More than Triple 

Wall Street analysts expect Nvidia to post revenue of $20.37 billion in the fourth quarter compared to  $6.05 billion in the prior-year quarter. This implies that NVDA’s Q4 revenues will more than triple on a year-over-year basis.

This massive growth in the company’s top line is likely to be driven by the ongoing momentum in the Data Center business. The continued ramp of the NVIDIA HGX platform, which is the reference architecture for AI supercomputers and data center infrastructures, will likely drive its Data Center revenue and overall sales.

Thanks to the higher sales and operating leverage, Nvidia’s bottom line could also mark a significant jump in Q4. Analysts expect NVDA to post earnings of $4.59 per share in Q4, up about 422% year-over-year. 

Is Nvidia a Good Stock to Buy Right Now?

According to the analysts’ consensus rating, Nvidia is a Buy ahead of the fourth quarter earnings release. NVDA stock has 37 Buys and three Holds for a Strong Buy consensus rating. However, as NVDA stock has jumped about 47% year-to-date and is up about 252% in one year, analysts’ average price target of $746.91 implies a limited upside potential of 2.86%. 

Commenting on the limited upside potential, Susquehanna analyst Christopher Rolland said investors have already factored in much of the potential gains in the short term. He expects NVDA to deliver a solid Q4 and believes that the magnitude of the beat will determine the future trajectory of NVDA stock. Rolland reiterated a Buy on NVDA stock on February 14 and increased the price target to $850 from $625. 

Insights from Options Trading Activity

It’s worth noting that options traders are pricing in a +/- 11.14% move in NVDA stock on earnings, greater than the previous quarter’s earnings-related move of -2.46%.

The anticipated move is determined by computing the at-the-money straddle of the options closest to the expiration after the earnings announcement.

Learn more about TipRanks’ Options tool here.

Bottom Line

Nvidia is poised to deliver strong fourth-quarter results, with AI-driven demand in the Data Center business to support its sales and earnings. However, the recent rally in its shares indicates that the positives are already reflected in its current market price. 

Disclosure