Two of our favorite stocks from the Q3 earnings season were Nvidia (Nasdaq: NVDA) and Qualcomm (Nasdaq: QCOM). Both had accelerating revenue growth. When flowing those trends through to future quarters our targets for revenues and earnings are nicely higher than the Street. That gives us the conviction that both stocks and more Qualcomm have stock price upside potential ahead. We run through some of those key data points in the video above and in the article below.

Qualcomm Has Big Implied Revenue And Earnings Upside Ahead

For Qualcomm, you can see below the accelerating revenue growth over the last few quarters.

Source: Elazar Advisors Models With Data Pulled From Company Reports

We look at the two-year acceleration. The two-year simply adds up "this" year's revenue growth rate to "last" year's revenue growth rate. The reason I like to use that is it tends to smooth out one timers to see an underlying trend. Here you see something powerful, an accelerating trend. -13% to +18% to +67% to +59% to + 65% to last quarter's 79% to the company's guide that implies a two-year of continued acceleration to 93%.

Our model for 2022 revenues is built off of this and has a revenue target of $47.7B. The Street is at $42B. But our estimates don't assume a continued acceleration next year (but probably should) yet still are already way above the Street.

The company on the last earnings call said the Street was too low for 2022.

Taken all in we have big EPS upside vs. the Street which drives meaningful stock price upside potential over the next 12 months.

Nvidia Datacenter In Launch Mode Gives Us A Teensy Little $1B In Revenue Upside in Q4 Alone

What's a billion dollars between friends. If we flow through the trends of their Datacenter revenue launch we'd get about $1B in upside versus their guide for Q4 alone.

Here's that key business Datacenter.

Source: Elazar Advisors Models With Data Pulled From Company Reports

Above you see an accelerating sequential growth rate ("QTQ") from .2% to 7.6% to 15.5% to 24.1%. To institutional investors, there's probably nothing more exciting you can get from Nvidia than for this key business accelerating. Even though Nvidia's Gaming business is bigger, Datacenter sparks more interest with its larger potential size and growth rate and can ultimately be more meaningful for Nvidia's earnings in the future.

If you look at the two-year (which I described above why I use it) you see Datacenter go from 153% to 139% to 159% to 203% to Q3's just-reported 216%. If you assume the two-year revenues hold or continue to go higher then Nvidia is going to blow away their guidance for Q4 and future quarters.

We flowed through some of those trends for next year getting to $47B in revenues versus the Street of, uh, only $31B. The Street doesn't do this math. Generally, sell-side analysts just plug in what the company tells them to. We, however, plug in what we think is realistic. When you see current trends flow through to future quarters and can logically see why that can happen you can let the earnings model work for you to tell you where EPS will go.

In this case, it gets us big leverage and EPS upside which we think is enough to give us conviction that the stock has stock price upside.

Conclusion

We had a few big finds from earnings season and wanted to share with you a couple of them. Earnings generally drive stock prices. When you can envision earnings being much higher than the Street based on flowing through recent trends you can build conviction which stocks can maintain momentum. Nvidia and Qualcomm have that upside momentum potential.