By coinnews 
00:00 Speaker A
Nvidia’s first quarter earnings due out after the bell today. Yahoo Finance’s tech editor, Dan Howley is here now with the key things to watch for in the report. Dan, what are the things that are kind of pillars to what we need to hear from Nvidia?
00:13 Dan Howley
Yeah, I think how they’re dealing with the China situation and obviously overall data center sales. And so, let’s just go over the numbers real quick that we’re expecting. We’re looking for earnings per share of 88 cents on revenue of 43.3 billion. That would be up from the 61 cents last year in the same quarter and 26 billion of revenue. Now, as far as data center goes, we’re looking at 39.2 billion, that would be up from 22.5 billion, 75% year-over-year increase. Uh, and then the, you know, formerly largest aspect of this business, gaming, is set to go to 2.8 billion, that would be up from 2.6 million. But really what we want to focus on is China and that’s because of the bans that the Trump administration put in place for Nvidia’s H20 chip. Now, that chip was originally created for Chinese, the Chinese market, specifically because they weren’t allowed to sell more powerful chips than that. So, they built the H20. They had built a prior chip before that as well. Uh, but now, both of those exceed the, uh, kind of limits that are in place on these chips to be sold. And so, for revenue out of China, it’s going to be interesting. Expectations for 6.2 billion, that would be up 150% since the same time last year. Uh, obviously, the US is its largest market, 21.6 billion. But what does that mean then now that the H20 isn’t available for Nvidia going forward and for this quarter? Well, Nvidia released a statement saying that they’re going to have to take a 5.5 billion dollar charge on the H20 chips that they had already prepared and orders things along those lines. So, that’s going to be an issue. We’ll be on the lookout for whether or not Jensen Huang, CEO says anything about a newer chip. There’s been reports from Reuters that they’re working on a successor to the H20 and if that allows them to continue to operate in the Chinese market, Jensen has said in the past that if Nvidia is unable to participate in the Chinese market, it gives Chinese companies a leg up because naturally, they’re going to go for whatever’s available and saying that that undermines Washington’s attempts to ensure that the US has AI supremacy.
04:15 Speaker A
Yeah, and Dan, it’s interesting. I think the sentiment across Wall Street here is a bit subdued. Bank of America saying second quarter guidance could be messy. Piper Sandler expecting the company to miss on revenue. But both of those firms and more broadly across the street, there’s still bullishness longer term on Nvidia. What does Jensen Huang have to deliver today in order to shift the near-term sentiment on this stock?
04:46 Dan Howley
Yeah, I think he has to show that Blackwell is selling very well, that they’re getting it out to customers, that they continue to see increased demand. I think playing up the obvious deals they had announced in the Middle East with Saudi Arabia and the United Arab Emirates. Those will be opportunities to say, look, there’s still the ability to get at these kind of big deals that people are still looking for. And so, you know, I think part of the issue here is that Nvidia’s been the hot topic for a bit, but that doesn’t mean that everyone that wants AI chips has gotten them. There’s still a huge demand. And if you look at the hyperscalers, they’ll say, look, we have more demand and capacity. So, we don’t have enough chips. So, how is Nvidia ensuring that those customers get it? And then, I think one of the things that’s often overlooked is they regularly say that roughly 50% of their revenue comes from these hyperscalers. How are they diversifying beyond that, right? Like, where else are they going to be getting their revenue that matters? Uh, and so, that’s where that idea that Jensen has been pushing about sovereign AI really matters. With, you know, the Saudi investment in United Arab Emirates, that’s the idea there, that these countries are making these purchases and ensuring that Nvidia has more room to grow.
07:06 Speaker A
Especially as their customers start to also become competitors as hyperscalers work on their own chips, as you know, Dan. Thank you so much. I know you got a busy day ahead. So, we appreciate your coverage in advance. Thank you.
07:25 Dan Howley
Yeah.