Earnings season: Nvidia profits are forecast to come in at $0.92c a share

Nvidia Q1 24 – 24/05 – having hit two-year lows back in October last year, Nvidia shares gone an absolute tear since then, pushing above their highs from 2022 in the process, as it looks to return to the record highs seen in November 2021.

Nvidia, along with Meta Platforms has helped to drive a lot of the gains seen in both the Nasdaq 100 and S&P500 so far year to date with the shares up over 100%. The sharp rebound appears to be being driven by demand for higher specification AI chips, where Nvidia is a key supplier. At the end of last year Q4 revenues came in line with expectations at $6.05bn, while profits saw a beat at $0.88c a share. On guidance, the company was more bullish contrasting with the pessimism that characterised its Q3 downgrades, projecting Q1 revenue of $6.5bn +/- 2%. With the increasing popularity of AI, the company appears to be banking on the push towards AI to drive its revenue growth given the slowdowns in other areas of its business, like gaming. Profits are forecast to come in at $0.92c a share.

Snowflake Q1 24 – 24/05 – another company that benefitted from the pandemic lockdowns as more businesses moved into the cloud.

The recent numbers from Amazon, Microsoft and Alphabet have shown that their cloud business has continued to grow, and as a relative minnow in this space there is no reason why Snowflake can't do something similar. The shares haven't moved much since February when the company posted strong Q4 numbers and solid guidance. In Q4 revenues rose 54% to $555.3m, while projecting that revenues for 2024 would rise by 40% to $2.7bn. Snowflake management went on to project Q1 revenues of between $568m to $573m, though consensus has seen this rise to $609.5m and profits of $0.05c a share.  

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Williams-Sonoma Q1 24 – 25/05 – this high-end retailer has seen its shares struggle over the past few months, the shares have sunk towards the November lows of last year, despite retail sales in the US remaining relatively robust.

In Q4 revenues came in at $2.45bn, which was 5% below consensus with all areas of the business missing forecasts. The mood didn't appear to be helped by weak Q1 guidance, even allowing for the fact that Q1 tends to be a weak quarter for the owner of Pottery Barn. Q1 revenues are projected to decline from last year to $1.79bn, although e-commerce is expected to do well, and generate a good proportion of that number. Given the low-ball expectations here there is scope for an upside surprise, with profits also expected to be lower at $2.38c a share.