Nvidia (NVDA) is scheduled to report results of its first fiscal quarter after the market close on Wednesday, May 26, with a conference call scheduled for 5:00 pm ET. What to watch for:

1. OUTLOOK: Nvidia announced at its annual Investor Day that first-quarter revenue for fiscal 2022 is tracking above its previously provided outlook, with outperformance in each of its market platforms. "While our fiscal 2022 first quarter is not yet complete, Q1 total revenue is tracking above the $5.30 billion outlook provided during our fiscal year-end earnings call. We are experiencing broad-based strength, with all our market platforms driving upside to our initial outlook," said Colette Kress, executive vice president, and chief financial officer of Nvidia.

"Within Data Center we have good visibility, and we expect another strong year. Industries are increasingly using AI to improve their products and services. We expect this will lead to increased consumption of our platform through cloud service providers, resulting in more purchases as we go through the year. Our EGX platform has strong momentum, and we expect this will drive increased revenue from enterprise and edge computing deployments in the second half of the year. Overall demand remains very strong and continues to exceed supply while our channel inventories remain quite lean. We expect demand to continue to exceed supply for much of this year. We believe we will have sufficient supply to support sequential growth beyond Q1," she continued.

The company also raised its first-quarter revenue estimate for its new CMP product for industrial-scale cryptocurrency mining to $150M, up from $50M previously expected. During the company's last earnings call back in February, Nvidia had said it expected first-quarter revenue of $5.3B, plus or minus 2%, gross margin of 66%, plus or minus 50 basis points, operating expenses of $1.2B, and tax rate of 10%, plus or minus 1%.

2. STRONG QUARTER EXPECTED: In a pre-earnings research note to investors, Morgan Stanley analyst Joseph Moore said he sees a strong quarter for Nvidia especially in gaming, with data center strength being key. Revenue in gaming is completely supply-constrained, with channel inventory remaining very lean, the analyst contended. That should point to multiple quarters of strong shipments, as when supply does catch up to demand there will likely be substantial channel fill, he added. Further, Moore argued that while the strength in gaming is completely clear, the sustainability risk is somewhat elevated due to cryptocurrency impact. In that context, the strength of the data center business will be key. He would assume that there is upside in the data center business given Nvidia's strong growth drivers and the recovery in enterprise/cloud.

Also commenting on Nvidia's upcoming results, Susquehanna analyst Christopher Rolland said demand for GPU's remains white-hot, but he expects the pace of demand to slow past the April quarter as re-openings continue across the U.S. and physical activities resume. He also noted a high bar of execution, particularly as the shares have outperformed the index. Rolland reiterated a Positive rating and a $700 price target on Nvidia shares.

3. STOCK SPLIT: On Friday, Nvidia announced that its board of directors declared a four-for-one split of its common stock in the form of a stock dividend to make stock ownership more accessible to investors and employees. The stock dividend is conditioned on obtaining stockholder approval at the company's 2021 Annual Meeting of Stockholders to be held virtually on Thursday, June 3, to increase the number of authorized shares of common stock to 4 billion shares. If approval is obtained, each Nvidia stockholder of record at the close of business on June 21, 2021, will receive a dividend of three additional shares of common stock for every share held on the record date, to be distributed after the close of trading on July 19, 2021. Trading is expected to begin on a stock split-adjusted basis on July 20.

4. ARM DEAL: After the U.K. Secretary of State issued an Intervention Notice in the proposed acquisition of Arm by Nvidia, Citi analyst Atif Malik lowered his deal closing probability to 10% from 25%. It appears that the U.K. is pushing forward with a more stringent review of antitrust issues, including potential national security concerns, and coupled with recent news that Nvidia announced an ARM-based CPU, "this makes the approval process more complicated and increasingly unlikely," Malik told investors in a research note late last month.