Will chipmaker Nvidia’s earnings report be blockbuster? Or super-blockbuster?

Nvidia — one of the so-called “Magnificent Seven” tech stocks — reports its financial results for the fourth quarter after markets close on Wednesday.  

The leading developer of chips and infrastructure for generative AI has been flying high; Nvidia has forecast it would hit $59 billion in revenue for 2023, which is double what it brought in the year before. The company’s high-end graphics semiconductors are crucial to AI research and development around the world, which has sent demand through the roof.

While Nvidia’s stock dragged the market down on Tuesday ahead of its earnings, its meteoric rise before that made it the third most-valuable company on the planet after Microsoft and Apple. The only question about the company’s fourth-quarter report?

“Is it going to be blockbuster or super-blockbuster?” said Jacob Bourne at Insider Intelligence.

Even if it’s super-blockbuster, how long can that last? Right now, Nvidia is way ahead of the competition— companies like Intel and AMD, noted Ted Mortonson at Baird, which is a Marketplace underwriter.  

“They’re holding all the cards,” he said.

But he predicts more challenges as AI takes off: a big push for government regulation, soaring energy costs and restrictions on technology sales to China. 

At this point though, “Nvidia really has a huge lead,” said Babson management professor Peter Cohan. “And investors have such high expectations of its growth, unless it exceeds those, there’s a real danger that the stock will take a hit after it announces its results.”