Key Factors To Look For Ahead Of NVIDIA's (NVDA) Q4 Earnings

NVIDIA Corporation (NASDAQ:NVDA) is set to report fourth-quarter fiscal 2018 earnings results on Feb 8. This company has witnessed a remarkable streak of beating earnings estimates, especially when looking at the previous four reports. In fact, over the preceding four quarters, NVIDIA surpassed the Zacks Consensus Estimate, with an average positive earnings surprise of 33.5%.

Let’s see how things are shaping up prior to this announcement.

Factors to Consider

Widely known for its video-gaming chips, NVIDIA has pioneered the art and science of visual computing. With singular focus on this field, the company offers specialized platforms for the gaming, automotive, data-center and professional visualization markets. Its products, services and software deliver amazing experiences in virtual reality, artificial intelligence and autonomous cars.

As usual, the gaming segment is anticipated to remain the largest contributor to the company’s overall fiscal fourth-quarter revenues and will continue to witness growth. This segment is likely to witness year-over-year growth of 16.5% and reach $1.57 billion in the to-be-reported quarter, per the Zacks Consensus Estimate.

However, the major growth is likely to be contributed by the company’s data-center segment. Demand for NVIDIA’s datacenter-focused products has exploded due to an increase in data-center production around the world, and management has successfully marketed its solutions to compete with industry leaders like Intel (NASDAQ:INTC) . Per the consensus estimate, the segment is likely to grow 85.5% from the year-ago quarter level and reach $549 million in the fiscal fourth quarter.

Furthermore, NVIDIA’s overall performance is likely to benefit from its growing strength in the artificial intelligence (AI) space. The company’s cutting-edge technology has helped it become the leading player in providing AI for applications to autonomous driving vehicles, outpacing other competitors, such as Intel and Advanced Micro Devices (NASDAQ:AMD) , in terms of growth.

Notably, during CES 2018, NVIDIA revealed that over 320 companies, including Baidu (NASDAQ:BIDU) , Uber and Volkswagen (DE:VOWG_p), are working with it on developing self-driving technology. All this makes us optimistic about the company’s automotive segment’s fiscal fourth-quarter performance. Per the consensus estimate, the segment is projected to grow 17.2% year over year and reach $150 million at the end of the quarter under review.

NVIDIA Corporation Price and EPS Surprise

NVIDIA Corporation Price and EPS Surprise | NVIDIA Corporation Quote

What the Zacks Model Unveils?

Our proven model conclusively shows that NVIDIA is likely to beat earnings estimates this quarter. Per our model, a stock with a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold), has higher chance of beating estimates. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter. NVIDIA currently carries a Zacks Rank #2 and has an ESP of +6.87%. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for the quarter is pegged at $1.16, reflecting a year-over-year increase of 17.2%. The Zacks Consensus Estimate for sales of $2.66 billion indicates around 22.4% growth from the prior-year quarter.

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