Nvidia is leaning harder into the machinery behind artificial intelligence, using its cash to push deeper into the infrastructure that supports the boom. The company is set to report first-quarter earnings on Wednesday, May 20, and one analyst says the numbers could top Wall Street’s view by a wide margin.
Atif Malik sees $1.4 billion in revenue upside in the quarter versus consensus estimates, and he also looks for $2 billion in sales upside in the July-ended quarter. That optimism comes as Nvidia’s market story shifts from pure chip demand to a broader nvidia supply chain investment play, with the company announcing its own CPU to compete with Intel and AMD and a partnership with Corning in optics, another bottleneck in the AI trade.
Art Hogan said Nvidia is using its cash to make itself much more a part of the AI infrastructure, and he noted that the company has also announced its own CPU that will compete with Intel and AMD. He pointed to the Corning partnership as well, saying it reaches into optics, one of the choke points in the AI buildout. Hogan added that every day brings something better about Nvidia, but right now it is not the market’s favorite story.
That shift matters because the stock has lagged even as the SOXX semiconductor ETF has broken out and is up 70% year to date. The market is rewarding a different set of names at the moment, with CPU makers, DRAM makers and semi-cap equipment companies drawing more attention than the company that has dominated the AI trade. Nvidia, meanwhile, still has 76 buy recommendations on the street.
The contrast is stark: Nvidia remains the central name in AI, but investors are increasingly asking whether the next leg of the rally will come from the tools and parts that let the boom keep expanding. If the company can turn its spending into a bigger share of that stack, Wednesday’s report may be less about whether Nvidia is growing and more about how much of the AI buildout it intends to own.
