Nvidia's financial report this week will be very good, but investors are more concerned about the GTC conference in March.

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Nvidia is about to release its quarterly financial report. Market expectations are generally optimistic, but analysts believe the stock price reaction may still be muted, with the real catalyst likely to come at the Nvidia GPU Technology Conference (GTC) in March.

After the US stock market closes on February 25th, AI super-giant Nvidia will release its latest financial report, with the earnings call scheduled for 2:00 PM Pacific Time on February 25th, which is 6:00 AM Beijing Time on February 26th.

David O'Connor, analyst at BNP Paribas, expects the tone of the report to be "quite positive," but impressive numbers may not necessarily lead to a significant rise in stock price. He believes Nvidia may reserve the most market-impacting information for disclosure at the March GTC conference.

Nvidia's stock has risen by only about 2% this year, far behind the Philadelphia Semiconductor Index's 16% increase during the same period. The competitive landscape for AI chips, the pressure on gross margin from rising memory chip costs, and the direction of capital spending by hyperscale cloud companies are several core issues investors are focusing on this earnings season.

Stable performance expectations, but the market may have already priced in

According to a FactSet composite forecast, Nvidia's fourth fiscal quarter adjusted EPS is expected at $1.54, revenue at $66.1 billion, with data center business expected to contribute $60.7 billion. Full-year revenue is expected at $213.8 billion, and first quarter forecasted revenue at $72.9 billion.

The problem is that strong performance numbers over the past few quarters have repeatedly failed to boost the stock price. Market expectations for Nvidia are already quite high, and the room for outperformance is getting narrower. O'Connor believes investors have already shifted their focus ahead to the March GTC conference.

This financial report is also seen as a health check for AI infrastructure investment.

Andrew Rocco, stock strategist at Zacks Investment Research, says Nvidia's performance will provide a reference for judging the vigor of AI spending, and will also reveal the operating status of emerging cloud computing partners such as CoreWeave and Nebius Group.

Gross margin and competition are key issues

O'Connor points out that the continuous rise in memory chip prices means whether Nvidia can maintain its gross margin under increased cost pressure will be one of the focal points of the earnings call.

Another issue is competition. Custom chip projects such as the Tensor Processing Unit (TPU) jointly developed by Google and Broadcom are receiving increasing attention, and the market is beginning to question whether Nvidia's long-term dominance can persist.

HSBC analyst Frank Lee forecasts that demand for Nvidia GPUs will remain strong. Alphabet, Amazon, Meta, and Microsoft plan a combined $650 billion spend on AI infrastructure this year, which itself highlights the scale of demand.

Frank Lee believes that Nvidia GPUs will remain the mainstream choice for AI computing investment for the foreseeable future. However, how long "the foreseeable future" will last is a question that no one can answer definitively.

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