Market Analysis

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Jefferies analysts noted in a Thursday report that Nvidia (NASDAQ) is likely to continue surpassing earnings expectations in the upcoming quarters, though the beats may be smaller. The firm emphasizes that demand for Nvidia's Hopper remains strong, with inventories and ongoing production expected to facilitate the transition to the upcoming Blackwell platform.

Gigabyte has reported no slowdown in Hopper orders, with demand outstripping supply and continued rush orders. Although average selling prices (ASPs) are expected to rise gradually, strong volume should keep targets within reach. Analysts anticipate a significant earnings beat in July and robust guidance through October, with expected beats of approximately $1 billion for both results and guidance.

Regarding Blackwell, early volumes are projected for Q4, with a larger ramp-up anticipated in the latter half of the year. Despite some investor concerns about potential misses, Jefferies does not foresee significant impacts on Nvidia's performance.

Recent media reports have suggested possible delays of three months or more for Nvidia's Blackwell chips due to design issues. Jefferies notes that while investors have been weighing the potential impact of these delays on Nvidia’s earnings, the general consensus is that the chipmaker’s competitive position and outlook for 2025 remain stable.

There is ongoing debate about Nvidia's GB200 NVL content, with some viewing these as rack-level sales. While Jefferies remains confident in its above-consensus estimates for July and October, they acknowledge that the anticipated cushion has decreased. Current estimates are influenced by two main factors: the short-term revenue impact of Blackwell delays and the longer-term shift from NVL volumes to the mix of DGX versus MGX configurations.

Paraphrasing text from "Reuters" all rights reserved by the original author.