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Nvidia (NVDA) is scheduled to report results of its first fiscal quarter after the market close on Wednesday, May 22nd, with a conference call scheduled for 5:00 pm ET. What to watch for:

EXPECTATIONS: For the first quarter, Nvidia has said it sees revenue of $24.0B, plus or minus 2%; GAAP and non-GAAP gross margins are expected to be 76.3% and 77.0%, respectively, plus or minus 50 basis points; GAAP and non-GAAP operating expenses are expected to be approximately $3.5B and $2.5B, respectively; GAAP and non-GAAP other income and expense are expected to be an income of approximately $25M, excluding gains and losses from non-affiliated investments; GAAP and non-GAAP tax rates are expected to be 17.0%, plus or minus 1%, excluding any discrete items.

Current consensus EPS and revenue forecasts for Nvidia's April-end quarter stand at $5.59 and $24.65B, respectively, according to data from Yahoo Finance.

BUY INTO EARNINGS: Evercore ISI suggested buying Nvidia into its earnings report scheduled for May 22ND as the firm believes the positives outweigh the negatives impacting the set-up into the print. While the positive business trends appear well-understood, the combination of decelerating revenue growth and increased concerns about competition has driven Nvidia's relative price to earnings ratio to the lower-end of the 10-year range, which the firm sees "creating a scenario where a healthy beat-and-raise will lead to near-term upside to the stock," adding that it expects such a healthy beat-and-raise. Evercore has an Outperform rating and $1,160 price target on Nvidia shares.

BEAT/RAISE WIDELY ANTICIPATED: Stifel raised the firm's price target on Nvidia to $1,085 from $910, while keeping a Buy rating on the shares ahead of the company reporting its fiscal Q1 of FY25 results. A "beat/raise is widely anticipated" once again, notes the firm, which is expecting "another round of strong results and outlook" as the AI infrastructure investment cycle continues. Stifel is not expecting any meaningful change in tone or messaging relative to what was heard at GTC in mid-March. Nvidia remains the firm's top pick relative to the AI infrastructure investment theme.

Voicing a similar opinion, Oppenheimer reiterated an Outperform rating and $1,100 price target on Nvidia, saying it sees a beat/raise quarter led by "insatiable CSP AI accelerator appetite." The firm added that it sees flagship H100 GPU supply constraints continuing to ease, and the firm believes that significantly lower lead times now are allowing management to "better capture demand."

Meanwhile, Susquehanna raised the firm's price target on Nvidia to $1,100 from $1,050, keeping a Positive rating on the shares. The firm expects another strong report, but noted elevated expectations as the sell-side has ratcheted July and 2024 estimates higher. Susquehanna continues to think at least a $1.5B beat is needed for a flat reaction to the stock price.

Barclays also raised the firm's price target on Nvidia to $1,100 from $850 and maintained an Overweight rating on the shares. The firm's channel checks continue to point to billion-plus of upside in the company's April and July quarters "with calls for an air pocket seemingly overblown." Asia checks point to Nvidia data center GPU unit upside potential close to 10% in the April quarter and just over 20% in the July quarter as capacity continues to come online, the firm tells investors in a research note. Barclays believes the company can capture incremental revenue upside due to pricing on H200, which will start shipping in the July quarter.

Additionally, Baird upped the firm's price target on Outperform-rated Nvidia to $1,200 from $1,050. The firm increased estimates citing continued strength in artificial intelligence-related demand for Nvidia. There is no match to Nvidia's products offering this year and next, which, combined with shortening lead times, should play well into the second half of the year from a market share standpoint, Baird tells investors in a research note. The firm says AI-related demand for Nvidia remains very strong.

SHARE VOLATILITY: BofA says Nvidia remains a top pick ahead of its Q1 report with a Buy rating and $1,100 price target. The firm expects strength versus consensus estimates, but says the stock will be volatile in the near-term due to three factors, namely quarterly deceleration ahead of Blackwell, Greater China dependence for the second half of the year, and a limited update to the "40% inference mix" metric. BofA also believes investor expectations are above consensus estimates for the April and July quarters. The firm expects a "beat/raise" quarter for Nvidia but also near-term deceleration ahead of Blackwell.

BLACKWELL ARCHITECTURE: Back in March, Nvidia unveiled its new generation of artificial intelligence chips and a new platform called Blackwell. The company's CEO Jensen Huang presented the new chips to a packed crowd at Nvidia's GTC event, noting that the first Blackwell chip, GB200, is expected to ship later this year.

Commenting on the kickoff of the flagship conference at the time, JPMorgan said that the company "continues to be 1-2 steps ahead of its competitors." A similar opinion was voiced by BofA, which added that while the announcements "were within expectations," they had "sizzle and substance" as the company continues to fundamentally widen its competitive moat.

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