Tomorrow, we get earnings from Nvidia — (still) the most important company in the world.
Let's talk about what to expect …
We've closely tracked Nvidia over the past three years in these daily notes. And as we've discussed, following the explosive growth in 2023, it became clear that Nvidia's supply had hit a wall by 2024.
Quarterly growth became relatively fixed, and the year-over-year growth rate slowed from triple-digits to mid-double digits.
But remember, in October of last year Jensen gave some very clear clues that growth was back.
In his keynote at an Nvidia developer conference in DC, he posted this slide of capex plans from the big hyperscalers …
This projected over half a trillion dollars in planned capex spend for 2026 — rising to $632 billion through 2027. So, more than $1.1 trillion over the next two years.
The bigger news was this next chart he showed …
From this, Jensen said they have 20 million of the most advanced chips already spoken for through 2026 (Blackwell and then Rubin), representing half a trillion dollars in revenue!
He went on to say, "the next five quarters there's half a trillion dollars" to fulfill.
So, that was a pretty good clue on what was coming in Q3 (the report this past November).
Would they deliver? Did they have the supply?
Yes, and yes.
They did $51 billion in data center revenue alone in Q3. It was the hottest quarter-over-quarter growth in seven quarters. And it was led by compute — the compute component grew by $10 billion, up 27% on the quarter.
That $51 billion was a huge number, and demonstrated that new global manufacturing capacity had come online for Nvidia's most advanced chips.
You can see it in this chart …
But if we parse Jensen's comments from that October presentation, the "five quarters" he referenced did NOT include Q3. So, tomorrow's Q4 would be the first of five quarters that Jensen himself has told us they have half-a-trillion dollars to fulfill.
And as we know from planned capex announcements from the big hyperscalers earlier this month, the demand is already quite a bit higher than Jensen projected in October of last year.
With this, it's fair to expect that Nvidia will put up another big quarter-over-quarter growth number in data center revenue.
Fulfilling on this demand, with its current net income margins, Nvidia would be a hyper-growth company trading about 20 times forward earnings.
