Nvidia is in for bigger earnings beats as Blackwell rolls out, analysts say
Despite Nvidia’s (NVDA) modest guidance for its fiscal fourth quarter, analysts are anticipating larger earnings beats on strong demand for its new artificial intelligence platform.
The chipmaker set its fiscal fourth quarter guidance at $37.5 billion, plus or minus 2% — slightly above expectations of $37.09 billion, according to analysts’ estimates compiled by FactSet (FDS). Nvidia’s expectations for the fiscal fourth quarter were “likely hampered by ongoing Blackwell shipment constraints,” Kunjan Sobhani, senior industry analyst at Bloomberg Intelligence, said in a note. Nvidia chief executive Colette Kress said both Blackwell and its predecessor, Hopper, are facing certain supply constraints, and that Blackwell demand is expected to exceed supply into fiscal year 2026. The modest guidance sent Nvidia’s shares slightly down in after-hours trading on Wednesday into Thursday morning.
“Unfortunately, market participants have become too short-term oriented,” Eric Clark, portfolio manager at the Rational Dynamic Brands Fund, said in a statement shared with Quartz. “Absolute good reports seem less interesting than relatively less good but still good. There is nothing wrong with NVDA, I suggest investors use any weakness to buy the stock because demand will be satisfied at some point and these slight misses will turn into big beats yet again.”
On the company’s earnings call, Nvidia chief executive Jensen Huang said production of its Blackwell AI platform “is in full steam” after a design flaw was fixed, and that the company expects to deliver more Blackwells in this quarter than previously estimated. In the fiscal third quarter, Nvidia said it shipped thirteen thousand Blackwell chips to customers.
“The supply chain team is doing an incredible job working with our supply partners to increase Blackwell, and we’re going to continue to work hard to increase Blackwell through next year,” Huang said.
Nvidia is likely “sold out” of Blackwell until the end of next year, and “has much better visibility in its forecasts than it is letting on,” Richard Windsor, founder of research firm Radio Free Mobile, said in a note.
“This allows it to offer guidance that it knows it can beat by a small margin, which will help the share price hold onto the massive rally it has enjoyed over the last 18 months,” Windsor said.
Nvidia’s shares are up over 198% so far this year.
Concerns with Blackwell’s commercial deliveries have not reflected in Nvidia’s earnings reports yet, likely because issues mostly center on data center infrastructure around the chips, and because customers don’t want “to lose their place in the queue” and are therefore buying Blackwell and fixing issues after, Windsor said.
Huang addressed a report that Blackwell chips are overheating in custom-designed server racks, saying “as you see from all the systems that are being stood up, Blackwell is in great shape.” He also said Nvidia plans “to execute on our annual road map” of producing new chips.
Jefferies (JEF) analysts said in a note that they “are not overly concerned with any of the issues on this call” and that they “see increasing beats as Blackwell ramps.”
But strong demand for Blackwell and Nvidia’s ability to deliver to customers despite production issues might not sustain growth in the long-term.
“Despite demand in the near-term continuing to be strong, we still believe a decline in demand for NVIDIA compute is inevitable as customers begin to scrutinize their ROI on AI compute,” analysts at D.A. Davidson said in a note.
