In light of overall market volatility and worries over overheated AI stocks, Nvidia shares have experienced a 5.6% decline over the last month. However, with the company's shares up roughly 150% YTD, forthcoming Q2 earnings on August 28 will provide insight into whether and how much gain investors should expect going forward. UBS analysts have provided their projections in a note to clients.

Wall Street anticipates the tech behemoth to post $28.6 billion in sales and $0.64 per share for the second quarter. UBS projects significantly higher earnings per share of $0.68 and $29.9 billion in sales.

The analysts project that data centre revenues will be around $26.3 billion ($22.9 billion for computing and $3.4 billion for networking); gaming revenues are estimated to be approximately $2.7 billion. Pro/Viz/Autos/OEM revs are modelled at $448M, $355M, and $90M.

Positive news has recently come from other tech companies regarding Nvidia. UBS highlighted that TSMC's robust Q/Q growth in HPC, KYEC's strong data processing segment results and its guidance for a 50% Q/Q increase, SMCI's very strong results, and strong AI results from Quanta were all attributed to strong Hopper demand.

Meanwhile, UBS pointed out that although Taiwan data processing export data has "always had high variability to NVDA results," it suggests that Q2 data centre income may fall short of $25 billion.

Additionally, it excludes networking and H20, which is growing in China, as well as other revenue-generating activities for NVDA.

UBS stated, "We believe Hopper/H200 demand is strong enough for NVDA to continue the recent pattern and guide to $31-32B with an implied data centre number close to $28B," in reference to the management's anticipated projection.

Though it doesn't seem like a favourable setup, they said, "investor bogeys are already in this range (Street revenue is ~$31.5B). We believe Blackwell's commentary will overshadow wherever guidance comes out as investors are already looking to the BW ramp in 2025."

UbS has a 12-month price target for Nvidia of $150 a share.

(Sources: investing.com, reuters.com)