Nvidia's Blackwell Chip Delay Clouds Earnings Outlook

Nvidia is set to report its second-quarter earnings for fiscal 2025, with investors keenly watching for updates on its Blackwell chip despite recent delays. Nvidia’s stock has surged 161% this year, including a 35% jump since its impressive first-quarter results, further boosted by a 10-for-1 stock split in June to attract more investors. 

The company briefly overtook Apple and Microsoft to become the world’s most valuable company, reaching a market valuation of $3.16 trillion before Apple reclaimed the top spot. Nvidia now holds second place, with Microsoft close behind at $3.07 trillion.

Wall Street forecasts Nvidia's earnings per share at $0.63 and revenue at $28.6 billion, reflecting 254% and 210% year-over-year growth, respectively. This exceeds Nvidia's earlier guidance, which its data center division bolstered. It is expected to generate $25 billion in revenue—an increase of 144% from the same quarter last year, though a slowdown from the previous quarter's 400% growth. 

The company’s gross margin, which rose to 78.4% in the first fiscal quarter from 64.6% the previous year, is expected to slightly decrease to 74.8% in the July quarter, signaling lower profitability.

Despite the delay in the Blackwell chip’s mass production due to design flaws, affecting orders from major clients like Alphabet and Microsoft, analysts believe production will ramp up by the fourth quarter of 2024. Nvidia's Hopper series, particularly the H100 and H200 chips, remains in high demand, with the latter potentially boosting gross margins by targeting the Chinese market amid U.S. export restrictions.