NVIDIA Earnings Report Upcoming, Wall Street Focusing on AI Market Trends

August 27th: Once the U.S. stock market closed on this day, NVIDIA is scheduled to release its second-quarter financial report. The market is closely observing its advancements in the U.S.-China AI competition, the chip supply-demand dynamic, and the participation of hyperscale customers. This financial report will also exert an impact on the overall stock market and the trend of the underlying artificial intelligence market. According to market data, NVIDIA is currently showing an intraday increase of 0.03%, and the NVIDIA concept stock CoreWeave is showing activity, currently rising by nearly 5%. Investors generally believed that the performance would exceed expectations prior to the release of the financial report. Based on FactSet data, NVIDIA is anticipated to announce revenue of $46.05 billion for the second quarter, which is higher than the $45 billion guidance provided in the previous quarter. The expected EPS is $0.95, and the net profit is $23.4 billion. The data center revenue is expected to reach $41.34 billion, representing a 57% year-on-year increase. Although this is a strong growth rate, it is lower than the 73% growth rate announced in the last earnings report by NVIDIA. Piper Sandler analyst Harsh Kumar stated that NVIDIA's guidance on its China business will be the core of Wednesday's financial report. NVIDIA's chips are at the center of the technological arms race. Trump announced that the U.S. will take a 15% share from NVIDIA's chip sales in China, while Chinese domestic companies are attempting to avoid using NVIDIA's H20 chips. There are reports suggesting that NVIDIA has suspended the production of H20 chips. As China endeavors to strengthen its domestic chip industry, NVIDIA's ability to generate revenue from the Chinese market will be a key indicator of the extent of technological advantage held by the U.S. Furthermore, hyperscale customers—companies constructing AI infrastructure—have been continuously raising their capital expenditure expectations and purchasing a significant number of NVIDIA GPUs. These companies with multi-billion-dollar budgets are undoubtedly favorable for NVIDIA. However, the sell-off in the stock market led by tech giants last week has raised concerns among some investors regarding the sustainability of this large-scale investment. In NVIDIA's first-quarter financial report, 30% of the revenue was derived from just two customers, indicating a high level of customer concentration. Nevertheless, analysts remain optimistic about hyperscale customer spending, believing that hyperscale customers are racing towards Artificial General Intelligence (AGI) and have a clear spending plan in place. This level of investment can at least continue for several more years.