Despite declining revenue and profits as the semiconductor industry endured its worst downturn since the early 21st century, Nvidia has consistently delivered better than expected earnings throughout 2019. Now the graphics chip maker is poised to report its 2019 fourth-quarter results on Thursday, February 13, and investors are expecting another excellent quarter as semiconductor demand looks poised to recover in 2020.
Expectations are for earnings of $1.66 a share on revenue of $2.95 billion. That compares with earnings of $1.78 a share in the third quarter. It also compares favourably with the fourth quarter of 2018, when earnings were $0.80 a share on revenue of $2.21 billion.
The increase will break a four-quarter streak of earnings declines, which will be particularly exciting for Nvidia investors. With sales momentum growing at the end of the year, an earnings beat is what investors are expecting, particularly since the company has delivered a positive earnings surprise in each of the past four quarters.
Those expectations of a positive earnings surprise have led to a gain of nearly 8% over the past two days for Nvidia shares. That’s given the stock a 15.4% gain since the start of the year, and an 85.4% gain over the past 52 weeks, making Nvidia one of the best performing stocks in the high-flying Nasdaq 100 index.
Recovery in the gaming and data centre segments of Nvidia‘s business is expected to drive strong results, and management guidance for Q1 2020 could give shares an additional push higher if it’s stronger than analyst forecasts of $1.52 a share.