The Market's True Earnings Expectations

NVIDIA heads into its fiscal third-quarter report with a business that keeps getting bigger and a stock that keeps getting cheaper. Three months ago, management delivered its most confident call yet. It guided revenue sharply higher, introduced an explicit framework of roughly 70% growth for fiscal 2028, and said demand was accelerating even at the company's enormous scale. The market has since marked the shares down nearly 20%, trailing the S&P 500 by about 18 percentage points. The reason is the one blemish on that call: the first reset of gross-margin expectations in more than a year, driven by memory costs that rose faster than NVIDIA anticipated. This report, due after the close on November 17, will show whether investors overreacted to that margin story or correctly sensed that the cost of growth is rising.

Wall Street expects earnings of $2.49 per share on revenue of about $109 billion. That would be a 91% revenue increase from the $57 billion reported a year ago, with earnings nearly doubling from $1.30. The revenue estimate sits just above the $108 billion midpoint of management's $105.8 billion to $110.2 billion range. The profit estimate is more demanding. At $2.49, consensus is already above the top of NVIDIA's $2.32 to $2.47 earnings guidance, and the Earnings Whisper of $2.60 sets an even higher bar. In short, the Street is not just expecting NVIDIA to hit its plan. It expects the company to beat its own profit guidance comfortably, even as margins are supposed to be compressing.