Wall Street Expects NVDA to Double Revenue & Other Earnings Metrics to Watch

network.com. Welcome back to trading 360. I'm Marley Kaden. We've got second quarter earnings season beginning to wind down. But the market will be fully focused next Wednesday on Nvidia when the world's most valuable company reports earnings after the closing bell. For what to watch on Nvidia and the chip trade ahead of the earnings event, let's bring in our panel. Adam Kunz, chief investment officer at Winthrop Capital Management, and Joseph Yonker, CEO and founder at Pure Play ETFs. Great to have you both on. Adam, let's start with you. I mean, Nvidia expected to deliver. I think it's about $91.8 billion in revenue. That's essentially double year over year at this point. Is a beat even a question anymore? Or is the question how high the bar has moved for the beat to be significant enough for the stock to move to the upside? Yeah, I think everyone's kind of gotten past the point of just hitting expectations or a slight beat is not good enough. Obviously the AI story is looking for, you know, what have you done for me lately? And what are you going to do for me in the future? So I think the focus is really going to be on how they're going to continue this. Obviously, there's a lot of stress and angst around the circular nature of funding the AI build out. And you know, how Nvidia is going to kind of evolve with that. So I think that's going to be more the story. And Joseph and investors are looking at Nvidia right now arguably as the ultimate show me stock in this show me story. What does Jensen Wong need to say to convince investors that this AI spending cycle has legs that go well beyond 2026, and move past some of those concerns about circular financing that Adam just mentioned? Yeah, I mean, let's be honest, you know, a simple beat on the current quarter is basically already priced into the stock with the markets really hunting for here is that that third quarter quarter forward guidance number. So investors want to see, you know, management target somewhere around $105 billion or more really kind of just to prove that sequential quarter over quarter momentum isn't stalling out. And, you know, when you talk about how the stock actually reacts on earnings night, that's where things tend to get interesting. So even with Nvidia sitting at, you know, a multi trillion dollar market cap, you know the forward multiple is actually trading at a very reasonable, you know, mid 20s p e relative to its its explosive growth rate. So on paper it still looks remarkably cheap. But you know, when sentiment and expectations are running that hot short term price action is kind of completely unpredictable. So you could see a flawless beat and raise quarter and still get technical profit taking or choppy trading just because of how fast the stock has run. Our view is pretty straightforward. I mean, any immediate post earnings sell off is kind of just a good buying opportunity. The fundamental cash flow generation and earnings power completely back up the current valuation levels. So if the market decides to throw kind of a knee jerk reaction, you know, our view is that creates a pretty prime entry window for long term capital to come in here. And Adam, throughout all of these hyperscaler names, I continue to have these conversations about if we're seeing any sign that AI demand is actually slowing. As you look at it, are we confusing questions about return on investment with questions about underlying demand specifically for Nvidia's products? Yeah, a little bit. And the reality is that there's tons of demand. Obviously revenue is doubling. They're getting into new chipsets. They're diving into the CPU world more. So that's all because they're being pushed with demand and the overall demand constraints you're seeing elsewhere. I think if you looked at Google's most latest cell phone release, it was very apparent that the constraints on chipsets being, you know, filtered towards AI instead of devices was apparent because that that phone really didn't have that many upgrades because of the restriction in supply. And you kind of saw with Nvidia that they're, you know, actually locking in substantial amount of supply because they do have these new chipsets coming with the Vera Rubin and there is tons of demand. So I think that's why you still want to pay attention to the, you know, the chip manufacturers and those designing the AI chips versus those trying to create the software that's going to use AI, because that's where there's still a lot of questions on whether there is going to be that return on investment for for Nvidia, there obviously is going to be because they're the ones behind it all. And so Joseph, what's your response to Nvidia still dominates the AI accelerator market. But Adam just highlighted we've got Google Amazon, Microsoft all developing their own chips here. AMD also gaining some traction. When if ever, does that start to become a meaningful threat to Nvidia's growth? Yeah. So you know, I think that the media is pretty hyper focused right now on like Blackwell deployments. I agree, you know, the real strategic story to kind of pay attention to is, is, you know, Vera Rubin architecture ramp up later this year along with their expansion into, you know, standalone CPUs. So what a lot of investors kind of overlook is that Nvidia is no longer just a graphics chip vendor. They're actively expanding into, you know, a $200 billion plus broader processor market. So management, you know, they're targeting nearly 20 billion in standalone Grace and Vera CPU revenue along with, you know, this fiscal year. So when Nvidia pairs its own custom CPUs directly with its GPUs, accelerators in the unified system, they effectively capture significantly higher dollar content for every single data center server rack being installed. So as enterprise customers, cloud partners look to drive down their operating costs and lower the cost per token for running live AI applications, the next generation architectural transition ensures that, you know, the data centers keep upgrading their hardware clusters. They aren't going to sit on legacy infrastructure. When Vera Rubin offers massive efficiency gains. So that that CPU expansion and platform integration kind of gives Nvidia a little differentiated edge and a brand new kind of multibillion dollar growth factor compared to those other competitors out there. All right. Well, we'll have the Super Bowl of earnings coming next Wednesday, but appreciate you being with us to preview them today. Adam, chief investment officer