Nvidia Expected to Beat Earnings Estimates as Demand Offsets Supply Constraints

Nvidia (NVDA, Financials) is expected to exceed fiscal fourth-quarter earnings estimates, according to KeyBanc, with analysts anticipating strong performance despite ongoing manufacturing challenges.

The company forecasts a modest rise in fiscal first-quarter guidance, somewhat above average estimates.

Production problems with Nvidia’s GB200 NVL servers still cause supply restrictions as lower initial yields limit shipments. The corporation is reducing the effect, however, by satisfying demand with HGX-based B200 servers depending on x86 head nodes.

DeepSeek’s growth and a scarcity of Huawei’s Ascend AI processors have prompted demand for Nvidia’s H20 GPUs to rise in China. Furthermore, clients of Nvidia’s cloud service providers are funding inventories at electronic manufacturing companies, therefore enabling the corporation to record sell-in shipments as income.

In premarket trade, Nvidia shares climbed 1% on the news. As of 11:27 a.m. GMT-5 on Friday, Nvidia shares were trading at $139.10, down 0.7% for the day. Reiterating his Overweight recommendation on the company, KeyBanc analyst John Vinh increased the price objective to $190 from $180 ahead of the next results release.

Following the market closure, Nvidia is scheduled to unveil its quarterly earnings results on Feb. 26.

This article first appeared on GuruFocus.