Expect more earnings beats from Nvidia 'albeit smaller ones': Jefferies

Nvidia (NASDAQ:NVDA) is likely to continue delivering earnings beats in the coming quarters, “albeit smaller ones,” Jefferies analysts said in a Thursday note.

The investment bank highlights that demand for Nvidia’s Hopper remains strong, with inventories and ongoing production expected to support the transition to the ramping of the upcoming Blackwell platform.

Gigabyte recently said it expects no slowdown in Hopper orders, Jefferies notes, with demand outpacing supply and continued rush orders. Although the anticipated increase in average selling prices (ASPs) will take more time, volumes should stay robust, making targets achievable.

“We expect another strong beat in July and strong guidance into October, with beats of about $1B for the results and guide,” analysts said.

Regarding Blackwell, early volumes are expected in Q4, with a larger ramp in the second half of the year.

“We have heard some investors start to worry about the possibility of missing numbers, but we don’t expect that to be the case,” they added.

Media reports recently revealed that Nvidia’s Blackwell chips may face delays of three months or even more due to design flaws.

Jefferies says that investors have been trying to handicap what the delay means for Nvidia’s earnings, with the majority believing that the chipmaker’s competitive position and the outlook for 2025 are unlikely to be significantly affected.

Still, there remains some debate regarding the content Nvidia will deliver in the GB200 NVL, with many still considering these as rack-level sales. While Jefferies analysts remain confident in their above-consensus estimates for July and October, they acknowledge that the cushion they previously expected has decreased.

They point out that Nvidia's estimates are currently influenced by two main factors: the short-term impact of Blackwell delays on revenue expectations, and the longer-term shift in focus from NVL volumes to the mix of DGX vs. MGX configurations.