Nvidia's stock price, which had recently reached an all-time high, decreased slightly on Wednesday, May 22, in anticipation of its first-quarter earnings report, which is scheduled to be released later.
Yahoo Finance reported that this earnings report is critical for investors as Nvidia has been a major player in the recent surge in AI-related markets over the past 18 months.
Now, Wall Street expects Nvidia to report revenue and profits soaring over 200% and 400%, respectively, compared to the prior-year period, driven by a surge in demand for its AI chips.
While Analysts project adjusted earnings per share of $5.65 on revenue of $24.69 billion, most of Nvidia's revenue is expected to come from its Data Center business, which is anticipated to generate $21 billion.
Nvidia Stock From AI Chips
According to VCPost, Nvidia's stock has surged over 12% in February, a steady pace compared to the overall 200% in the past year. Since the market lows in October 2022, the stock has climbed nearly 700%.
Shares were down about 0.4% in early trading on Wednesday.
Despite the positive outlook, Nvidia faces the challenge of its major customers, including Amazon, Google, and Microsoft, developing their own in-house AI chips.
While these companies may not entirely abandon Nvidia's chips, their push for proprietary solutions could reduce Nvidia's market share.
Competitors like AMD and Intel are gaining ground with their AI chip offerings. For instance, Microsoft announced it would offer AMD's MI300X chips alongside Nvidia's chips for AI model training and deployment.
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