As we approach Nvidia’s Q2 earnings, the market is buzzing with anticipation, especially after the release of whisper numbers from JPM’s trading desk. Here’s a detailed breakdown of the key figures, guidance, and market sentiment as Nvidia prepares to report its quarterly results.

Q2 Earnings Whisper Numbers

The whisper numbers paint an optimistic picture for Nvidia’s Q2 performance, surpassing both the company’s guidance and Wall Street’s consensus estimates.

• Q2 Revenue: Expected at $29.85 billion, well above the guidance range of $27.44 billion to $28.56 billion, and the consensus estimate of $28.6 billion.
• Data Center Revenue: Projected at $25.52 billion, a significant jump from $22.6 billion last quarter.
• Gross Margin: Anticipated to be 76.2%, exceeding the guided range of 75%.
• EPS: Forecasted at $0.69, outpacing the consensus of $0.64.

Guidance and Future Projections

Looking ahead, Nvidia’s Q3 and full-year guidance also suggests continued strong performance:

• Q3 Revenue: Predicted at $32.95 billion, outpacing the consensus estimate of $31.41 billion.
• FY 2025 & FY 2026 Revenue: Forecasted at $125.7 billion and $186.6 billion, respectively, significantly higher than the consensus estimates of $120.3 billion and $166.18 billion.

Market Sentiment and Earnings Setup

Tim Acruri from JPMorgan provides a bullish outlook for Nvidia, driven by robust demand in the data center segment. He notes that Nvidia’s upside potential is consistent with previous quarters, particularly in the data center business, which could reach as high as $26 billion, above the Street’s estimate of $25 billion.

Acruri’s optimism is supported by several key factors:

1. Strong Performance in Related Companies: Super Micro Computer posted impressive results, largely driven by high demand for Nvidia’s Hopper GPUs. Similarly, TSMC reported significant quarter-over-quarter growth in its High-Performance Computing (HPC) segment.
2. Positive Indicators from Taiwan: King Yuan Electronics, a key player in the data processing segment, guided a 50% quarter-over-quarter increase. Additionally, Quanta reported strong AI server results, further indicating robust demand for Nvidia’s products.
3. Potential Underestimation of China Demand: While Taiwan’s data processing export points to a $25 billion data center number, Acruri believes this might not fully capture the demand from China, particularly for the H200 networking revenue.

Challenges and Considerations

Despite the bullish setup, Acruri notes a few challenges that could impact Nvidia’s stock performance:

• Rising Expectations: As Q2 revenue estimates climb to $30.5 billion and Q3 projections exceed $33 billion, the bar is set higher, making it more challenging for Nvidia to outperform.
• Blackwell Ramp-Up: Investor focus is increasingly shifting towards Nvidia’s next-generation GPU, Blackwell, expected to ramp up in 2025. However, there is uncertainty around Nvidia’s earlier statement that it would have “significant” Blackwell revenue this year. Acruri suggests this was unlikely, given that customer volume shipments aren’t expected until mid-December, and have now been pushed back by 4-6 weeks.

Nvidia’s Q2 earnings are shaping up to be a critical moment for the company, with whisper numbers suggesting strong performance across key metrics. However, the elevated expectations and uncertainty surrounding the Blackwell GPU ramp-up could pose challenges. As always, the market will be keenly watching not just the numbers, but Nvidia’s commentary on future guidance and product launches.