Nvidia projected to deliver stronger-than-expected fourth-quarter revenue - Stifel

Investing.com -- Nvidia (NASDAQ: NVDA) is expected to post stronger-than-anticipated results when it releases its latest quarterly earnings this week, but key questions still hover around the chipmaking giant's outlook, according to analysts at Stifel.

Nvidia's stock price has more than tripled in the past 12 months thanks in large part to a spike in interest in its high-end graphics processors, which are considered to be crucial in the development of artificial intelligence. The booming demand is projected to have continued in the fourth quarter, with the Stifel analysts predicting that revenue will exceed the top of the firm's guidance of $20.4 billion.

Along with the results, which are due out after the closing bell on Wednesday, investors will likely be keen to parse through any commentary from Nvidia about the path ahead for AI demand this year.

In a note to clients, the Stifel analysts said overall demand for Nvidia's products has remained "robust." But they flagged that questions are starting to grow around whether a slowdown looms in spending on training AI applications, particularly as automated systems become better at evaluating and analyzing new information.

"While too early to tell, in our view, on timing of a potential peak in Training spend, the scaling of recent large-scale models suggests that we are not there yet," the Stifel analysts wrote.

They noted that potential concerns are also arising over how intensifying competition -- particularly from peer Advanced Micro Devices (NASDAQ: AMD) -- may impact how much Nvidia is able to charge for its chips.

However, the Stifel analysts said that they are not expecting Nvidia executives to provide any "significant" updates around these worries this week. Instead, they anticipate that more commentary will come at Nvidia's semi-annual AI developer conference in March.

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