NVIDIA Corporation (NASDAQ: NVDA) is set to release its quarterly earnings report on May 22, 2024, and the anticipation is palpable among investors and analysts alike. The company, which has seen a meteoric rise in its stock price and market valuation over the past few years, is expected to continue its impressive growth trajectory, driven largely by its dominance in the artificial intelligence (AI) and data center markets.
NVIDIA’s Recent Performance and Growth
NVIDIA’s financial performance in recent quarters has been nothing short of spectacular. For the third quarter of fiscal 2024, the company reported record revenue of $18.12 billion, a 206% increase from the same period a year ago, and a 34% increase from the previous quarter. This growth was primarily fueled by the data center segment, which saw a 279% year-over-year increase in revenue, reaching $14.51 billion. The company’s GAAP earnings per diluted share for the quarter were $3.71, up more than 12 times from a year ago, while non-GAAP earnings per diluted share were $4.02, up nearly six times from the previous year. For the fourth quarter of fiscal 2024, NVIDIA continued its strong performance, reporting revenue of $22.1 billion, up 22% from the previous quarter and up 265% from a year ago. GAAP earnings per diluted share for the quarter were $4.93, up 33% from the previous quarter and up 765% from a year ago, while non-GAAP earnings per diluted share were $5.16, up 28% from the previous quarter and up 486% from a year ago. For the full fiscal year 2024, NVIDIA’s revenue was up 126% to $60.9 billion, with GAAP earnings per diluted share of $11.93, up 586% from a year ago, and non-GAAP earnings per diluted share of $12.96, up 288% from a year ago.
Expectations for the Upcoming Earnings Report
As NVIDIA prepares to announce its earnings for the first quarter of fiscal 2025, analysts are expecting significant profit and revenue gains. The consensus estimate for revenue is $24.22 billion, which would represent a 237% increase from the same period a year ago. Analysts also expect earnings per share (EPS) to be around $5.50, a 405% increase from the previous year. These expectations are driven by the continued strong demand for NVIDIA’s AI and data center products, as well as the company’s ability to consistently exceed market expectations.
Analyzing NVIDIA with Validea’s Guru Models
To look at how NVIDIA stacks up fundamentally after its big run, let’s take a look at it through the lens of Validea’s Guru Analysis. The Guru Analysis is based on the investment strategies of legendary investors and currently gives NVIDIA an overall rating of “C”, suggesting the stock exhibits some fundamental strengths but also has noticeable weaknesses.
| Validea Guru Strategy | Score |
| Twin Momentum Investor | 100% |
| Momentum Investor | 89% |
| Quantitative Momentum Investor | 88% |
| Earnings Revision Investor | 80% |
| Growth/Value Investor | 80% |
| Growth Investor | 69% |
| Contrarian Investor | 64% |
| Value Investor | 57% |
| P/B Growth Investor | 55% |
| Small-Cap Growth Investor | 55% |
| P/E Growth Investor | 54% |
| Low PE Investor | 42% |
| Price/Sales Investor | 40% |
| Milennial Investor | 40% |
| Shareholder Yield Investor | 30% |
| Value Composite Investor | 28% |
| Multi-Factor Investor | 25% |
| Private Equity Investor | 14% |
| Patient Investor | 1% |
| Book/Market Investor | 0% |
| Earnings Yield Investor | 0% |
| Acquirer’s Multiple Investor | 0% |
Looking at specific guru strategies, NVIDIA scores highly on Dashan Huang’s Twin Momentum Investor approach with a 100% score. This strategy favors stocks with strong fundamental and price momentum. NVIDIA’s fundamental momentum places it in the top 6th percentile, while its price momentum over the past year (excluding the most recent month) ranks in the top 2nd percentile. The combination of these two factors puts NVIDIA in the top 1st percentile, easily passing Huang’s criteria.
NVIDIA also scores well on Validea’s Momentum Investor strategy with an 89% score. The company’s impressive quarterly EPS growth of 764.91%, consistent annual earnings growth, and strong relative strength all contribute to its high score. However, NVIDIA falls short on a few criteria, such as insider ownership and being in a top-performing industry.
The Quantitative Momentum Investor strategy by Wesley Gray gives NVIDIA an 88% score, noting the stock’s strong and consistent intermediate-term momentum. NVIDIA’s 12-month minus 1-month return ranks in the top 2nd percentile, and its return consistency places it in the top 6th percentile.
Other notable scores include an 80% on the Growth/Value Investor strategy by James O’Shaughnessy, which looks favorably on NVIDIA’s large market cap, strong cash flows, and high trailing 12-month sales. However, the stock’s low dividend yield prevents it from passing this strategy entirely.
NVIDIA scores lower on value-oriented strategies like Benjamin Graham’s Value Investor (57%) and the Patient Investor by Warren Buffett (1%). This is not surprising given the company’s high valuation and rapid growth.
While NVIDIA may not appeal to strict value investors, the company’s strong momentum, consistent earnings growth, and dominant position in the AI and data center markets make it an attractive option for growth-oriented investors. As NVIDIA heads into its earnings report, the Guru Analysis suggests that the company’s fundamentals remain solid, despite some weaknesses. Investors will be closely watching to see if NVIDIA can maintain its impressive growth trajectory and meet or exceed market expectations.
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