Nvidia faces the high expectations of Wall Street two years after the ia boom

Two years have passed since the explosion of generative artificial intelligence began to transform Nvidia business. Since then, the income of the chips manufacturer has more than tripled and the profits have quadrupled.

NvidiaThe Fiscal Profit Report of the Second Quarter, scheduled for Wednesday, will mark the second anniversary of growth, since the company went from being known as game chips manufacturer to its current position in the heart of the technology industry.

Last month, Nvidia became the first company to reach a market capitalization of $ 4 billion, and continued to appreciate. Since the end of 2022, around time, Openai launched chatgpt and caused the generative boom of AI, the price of Nvidia shares has twelve times. It ends 33% this year, closing Friday at $ 177.99.

Growth is still substantial for the size of a Nvidia company, but has slowed down. After five consecutive quarters of triple digit expansion in 2023 and 2024, income growth fell to 69% in the first fiscal quarter of this year. NVIDIA is expected to report a year after year of 53% to $ 45.9 billion in its second quarter report, according to the consensus of the estimates of LSE analysts.

The income of the data center in the first quarter represented 88% of the total sales of Nvidia, the clearest signal of how significant has become their business. The company said that 34% of total sales last year came from three clients without a name. Analysts say that the main end users of NVIDIA are the main internet companies and cloud suppliers as Microsoft, Google, Amazon and Goal.

“The assumptions and performance of Nvidia really dictate what the market will begin to set the price of AI trade, and that complete trade has essentially promoted the market last year,” said Melissa Otta, head of Alpha Research visible in S&P Global, who added the research of Wall Street.

Nvidia constitutes about 7.5% of the S&P 500.

Tech Megacap companies, which are not Nvidia, reported quarterly results at the end of July, updating Wall Street in their investment plans. In total, they seek to spend approximately $ 320 billion on AI technology and data centers this year.

Operai, which is still private but has an assessment in the hundreds of billions of dollars, says it will join SoftBank and Oracle To spend $ 500 billion in the next four years in the Stargate project, which President Donald Trump announced in January.

Analysts say that approximately half of the capital spending of AI ends with Nvidia. The dependence of the company in the so -called hyperscalers leaves it vulnerable to changes in the macroeconomic environment and in the artificial intelligence industry, which is still difficult to predict.

Openai’s CEO, Sam Altman, said last week that he believes that “investors as a whole are overexcited about AI”, and even said it could be a “bubble.”

But don’t expect a setback yet. Operai Sarah Friar financial director told CNBC on Wednesday that the company “constantly” does not have enough computer power.

As always, Wall Street will pay close attention to the Nvidia guide and other future comments of CEO Jensen Huang. For the third fiscal quarter, analysts expect 50% revenue growth to $ 52.7 billion, according to LSE. If Nvidia guides higher and exceeds estimates for the second quarter, analysts say that the type of “expiration and increase” could generate the optimism of the even higher.

The most important offer of NVIDIA is its Blackwell line, which includes individual graphics processing and complete systems that unite 72 GPU.

Blackwell’s strong numbers would affirm the continuous technological lead of NVIDIA and the support point among its key clients, said Ryuta Makino, an analyst at Gamco Investors, which has a participation in the company.

“Solidifies that hyperscalero spending is still very strong with the Blackwell ramp,” Makino said.

Nvidia said in May that its new product line reached $ 27 billion in sales, which represents approximately 70% of the income of the data center. That is a strong increase of $ 11 billion in the previous quarter.

As more Blackwell chips are installed, experts anticipate that their superior computer power will allow companies such as OpenAi and Anthrope Create even more capable models. Openai’s GPT-5, which was announced earlier this month, was trained in Nvidia’s last generation hopper chipsNot the new Blackwell processors.

Nvidia said last year that Blackwell would be limited by supply, how many chips can build and send its partners, and not for demand.

Blackwell Ultra is expected to send in the second half of 2025. NVIDIA recently delayed an Asia analysts report that said Rubin, chips technology that is expected to understand most of GPU sales in 2027, was seeing early production problems.

A visible sign of Nvidia’s rise is the worldwide fame of Huang. Trump regularly verifies it for Trump and during the quarter he traveled to meet with business leaders and officials in Taiwan, China, Germany, England and Saudi Arabia.

Huang recently reached an agreement with Trump to recover access to the Chinese market. Nvidia will pay 15% of its income by China Chip to the United States government in exchange for licenses to export its chip chip centered in China called H20, Trump said this month. The president added that he had asked for 20%, but Huang negotiated it.

The H20 is worth a lot for Nvidia. The chip would have contributed around $ 8 billion in sales in the second quarter, Nvidia said in May, before the United States government said it would require a license to send it to China, effectively closing sales.

Nvidia did not include any sale of H20 in its guide for the second quarter, and analysts doubt that anyone will include in their prognosis for the current period, partly because the Chinese government is pressing its cloud suppliers to wear harvest chips of companies like Huawei.

If H20 is included in the guide, it could increase income expectations by approximately $ 2 billion to $ 3 billion, according to Keybanc analysts, who recommend buying the shares. But they said they hope that Nvidia is completely excluded, following Micro Advanced Devices’ Leader of the beginning of August.

“In addition, given a possible 15% tax on AI exports and the pressure of the China Government so that their IA suppliers use national AI chips, we hope that management will guide Keybanc in a conservative way,” Keybanc analysts wrote.

Nvidia is working on a new Chinese chip based on Blackwell that would probably also need the president’s approval.

“I’m sure he is launching the president all the time,” said Secretary of Commerce Howard Lutnick about Huang last week in “Squawk on the Street” of CNBC.

LOOK: CNBC’s interview with Commerce Secretary Howard Lutnick