G Thang (NVDA Earnings)
NVIDIA will report its Q2 results after today's closing bell, followed by a conference call at 17:30 ET.
The Capital IQ consensus expects the manufacturer of graphics processing units to report a 40.7% yr/yr contraction in EPS to $1.15 on an 18.5% yr/yr decrease in revenue to $2.55 bln.
NVIDIA guided for Q2 revenue between $2.50 bln and $2.60 bln when it reported Q1 results on May 16.
NVIDIA is feeling competition from AMD, considering the company has already updated its RTX lineup from a year ago. NVIDIA's decision to continue tinkering with its latest product lineup suggests that gross margin is likely to feel some pressure.
The company reduced its inventory in Q1 from a record that was reached in Q4. Additional progress on this front would be encouraging.
TECHS:
NVIDIA is one of few chipmakers that have not rebounded from the industry-wide swoon at the end of 2018. The stock bottomed in the 130 area in late December, and it has traded in a range since then. Shares hit a 2019 high (193.47) in April, but they are now closer to their December low than the April peak.
NVIDIA trades at 23.9x forward earnings expectations, which represents a discount to AMD's 34.6x forward multiple.
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