After more than a year of quarterly revenue declines, Nvidia Corp. is finally expected to return to growth just before potentially announcing its next round of new products.
Nvidia NVDA, -1.04% is scheduled to report earnings after the close of markets on Thursday, and revenue is expected to increase for the first time in more than a year. Nvidia’s largest segment, gaming, and the business that has seemed most important to investors in recent years, data-center chips, are expected to drive the growth.
Data-center sales have been one of the most widely watched sectors in the chip industry this earnings season, after a decline in infrastructure sales in 2019 led to doubts about the cloud boom. Earlier in earnings season, Intel Corp. INTC, -1.59% reported a surprise jump in its data-center sales, while Advanced Micro Devices Inc. AMD, +0.83% reported that data-center sales were strong even though those results were masked by being lumped together with poor console sales.
Reporting after those two rivals means the bar has been raised for Nvidia. Instinet analyst David Wong, who has a hold rating and a $147 price target on Nvidia, expects data-center sales growth to be strong, but only against the “easy” comparisons of last year’s disappointment.
“We continue to think that its GPU products might only address a portion of the data center processor/accelerator market,” Wong said. “We will be interested to see if Nvidia will be able to demonstrate superior year-over-year growth in its data center segment when the comparisons become more difficult, beginning in the October 2020 quarter.”
Nvidia will follow up this earnings report with its annual GTC conference in March, at which new products are expected to be announced. Wells Fargo analyst Aaron Rakers, who has an overweight rating and