Citi has released a report indicating that Nvidia (NVDA, Financial) is set to report its quarterly earnings for October. The bank predicts total sales and data center sales to reach $33 billion and $29 billion, respectively. This forecast considers the transitional phase of Blackwell. Non-GAAP earnings per share are expected to be $0.72, slightly below the market expectation of $0.74.
For the quarter ending in January next year, Citi has revised its data center sales forecast upwards to approximately $30 billion to $40 billion. This adjustment follows Nvidia's resolution of the mask issue related to Blackwell, although supply constraints remain. Total sales and data center sales are projected to be $36.5 billion and $32 billion, respectively, with a gross margin of 73%, which is lower than market expectations due to a higher H200 proportion.
Citi anticipates that Nvidia will surpass expectations and revise forecasts upward for the quarter ending in April next year, as gross margins improve with an increased Blackwell proportion. Citing higher data center sales, Citi has increased Nvidia's earnings per share estimates for fiscal years 2025 to 2027 by $0.10, $0.55, and $0.08 respectively. The target price has been raised from $150 to $170, equivalent to a 35 times price-to-earnings ratio for fiscal year 2025, maintaining a "buy" rating.
