The technology sector stands at another pivotal juncture as Nvidia prepares to release its first-quarter earnings for fiscal 2025 that would set the tone for the year. After a stellar year, Nvidia's revenue guidance was increased by 114% to reach $130.5 billion in fiscal year 2025, with investors and analysts monitoring whether the AI chip giant can maintain its growth trajectory against a volatile geopolitical backdrop. Market expectations remain high, with analysts projecting a 45% jump in first-quarter earnings on revenue of approximately $43.2 billion, according to recent LSEG polls. This projected performance comes from a broader tech industry momentum continually being driven by artificial intelligence advancements, though the deteriorating macroeconomic environment, especially rising U.S. yields and the unsustainable debt debate, reignites fear in the general market.
However, alarm bells have been ringing in recent days as some analysts have issued rare warnings regarding Nvidia's stock ahead of the earnings announcement. These analysts estimate that Nvidia's full-year earnings per share outlook could potentially land between $3.90 and $4.00, approximately 10% below current consensus expectations. This moderate outlook comes regardless of Nvidia's Data Centre business achieving exponential growth, expanding from a humble $3 billion in fiscal 2020 to a grand $115 billion in fiscal 2025. The company's stock has also shown sensitivity to geopolitical factors, including recent updates on tariffs impacting its share prices along with other rate-sensitive businesses.
The name of the game for tech industry players is still heavily tilted towards artificial intelligence investments, with Nvidia at the forefront of this revolution as the primary supplier of the specialised chips powering AI applications. The company's result serves as a weather vane for the sector, with its quarterly results often setting the tone for market sentiment toward all tech stocks. Up until now, Nvidia has been nothing but a centre of attention for investors and policymakers alike, used as a bargaining chip against foreign countries and sheltered under the pretence of national security. This upcoming report will unveil how Nvidia intended to navigate the storm and how well they could steer.
Source: Reuters, Yahoo, Motley Fool, LSEG
Photos: Unsplash
