The upcoming week will feature several key earnings releases from companies operating in the AI sector. Investors will be closely monitoring the financial results of Nvidia, Salesforce, and Dell Technologies. These companies' performance will provide potential valuable insights into the current state of the AI industry and its growth prospects.
Nvidia's Q2 earnings: A crucial test for AI and semiconductor industries
Nvidia's stock price experienced a roller coaster ride in August. Following a brief dip below $100 at the beginning of the month (to around $92), the stock staged a strong recovery, rallying by over 38% to reach around $128 on August 21st.
Nvidia Daily Chart - Source: ActivTrader
As the dominant player in the AI processor market, with an 80% market share, Nvidia's earnings report will be closely watched by investors on Thursday, August 28th, after the close of the trading day. The results will offer valuable insights into the overall health of both the AI and semiconductor industries.
A strong performance, characterised by robust financial results, positive growth prospects, and encouraging guidance, could significantly boost Nvidia's stock price and bolster confidence in the AI industry. This could also have a positive ripple effect on the broader market, as investors assess the potential of AI-driven technologies to drive future economic growth.
Analysts are anticipating a strong performance from Nvidia in its upcoming Q2 earnings report. Forecasts suggest earnings of 64 cents per share and revenue of $28.65 billion.
Several professional analysts have expressed optimism over Nvidia's prospects. HSBC analyst Frank Lee has raised the price target for Nvidia's stock to $145, citing the underlying strength of AI GPU demand as a key driver for the company's continued success. Goldman Sachs analyst Toshiya Hari has also reiterated a "buy" rating with a $135 target, emphasising Nvidia's robust competitive position and strong demand for its products.
Salesforce Q2 earnings: Can AI drive growth?
Salesforce, the leading cloud-based CRM platform, is set to report its second-quarter earnings for fiscal year 2025 on August 28th. Analysts are anticipating a solid performance, with projected year-over-year increases of 11% in EPS and 7% in revenue.
In the previous quarter (Q1 FY 2025), Salesforce delivered revenue growth of 11% to $9.13 billion and a substantial increase in free cash flow of 43% to $6.08 billion. However, the market reacted negatively to the report, as it fell short of expectations, leading to a flat stock price for 2024. This marked the first revenue miss for the company since 2006, attributed to budget scrutiny and extended deal cycles according to its CEO, Marc Benioff.
Salesforce Daily Chart - Source: ActivTrader
Despite the Q1 setback, Salesforce has maintained a positive outlook for the fiscal year. The company has raised its earnings forecast to $9.86-$9.94 per share, compared to the previous estimate of $9.68-$9.76.
The success of Salesforce's recently launched Einstein Copilot, a customizable AI assistant for CRM, will be a key area of focus for investors during the company's Q2 earnings report. This tool, and its ability to drive revenue growth through generative AI integration, is crucial for Salesforce's future.
Salesforce's overall growth hinges on the successful adoption of its AI products. These AI-powered business intelligence tools offer significant benefits to existing customers, including faster data insights, increased automation, and improved innovation and agility. However, unlocking these benefits requires two crucial elements: high-quality data and robust data strategies.
Beyond the potential of AI, Salesforce also faces a challenge. With the AI sector rapidly innovating, there's a risk that customers might shift resources towards new AI startups instead of investing in Salesforce's offerings.
Salesforce's Q2 earnings will be a critical indicator of their ability to capitalise on the AI boom. Investors will be looking for evidence of strong revenue growth driven by AI adoption, alongside strategies to mitigate the risk of customer distraction by competitors. The success of Einstein Copilot and their overall AI strategy will play a significant role in determining Salesforce's future performance.
Dell Technologies: Will AI server demand fail to impress again?
Dell Technologies has solidified its position as a leading vendor of AI-oriented servers, a market experiencing rapid growth as companies invest in infrastructure to support predictive analytics and generative AI. The company's strong performance in the first quarter of 2024, with earnings and sales exceeding analyst expectations, further cemented its leadership.
However, despite the surge in demand for AI servers, Dell's profitability in this segment remains a concern. While the company's overall sales have grown, operating profits from its server business have remained flat, raising questions about the margins associated with AI server sales. Bernstein analyst Toni Sacconaghi has highlighted this issue, suggesting that AI servers may be sold at near-zero margins.
This profitability challenge has had an impact on Dell's stock price. Despite a significant rally of over 141% since the beginning of the year until the earnings report at the end of May, the stock experienced a temporary pullback following the release of the first-quarter earnings report.
Dell Technologies Daily Chart - Source: ActivTrader
Investors may have been disappointed by the lack of substantial profit growth from the AI server business, leading to a short-term decline in the stock price. However, the stock has since rebounded, gaining over 20% since the earnings announcement.
Despite the short-term challenges associated with AI server profitability, Dell's strong market position and the potential for future improvements in this area could be driving investor confidence. As investors await Dell's next earnings release, they will be closely watching for signs of progress in addressing profitability concerns related to AI servers.
A demonstration of improved margins or a clear roadmap for achieving higher profitability in this segment could further bolster investor sentiment and drive the stock price higher.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66-79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. ActivTrades PLC is authorized and regulated by the Financial Conduct Authority, registration number 434413. ActivTradesPLC is a company registered in England &Wales, registration number 05367727. ActivTrades Corp is authorized and regulated by The Securities Commission of the Bahamas. ActivTrades Corp is an international business company registered in the Commonwealth of the Bahamas, registration number 199667 B. ActivTrades Corp is a subsidiary of ActivTrades PLC. ActivTrades Europe SA, Public Limited Company, is authorized and regulated by the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg. ActivTrades Europe SA is a company registered in Luxembourg, registration number B232167. ActivTrades Europe SA is a subsidiary of ActivTrades PLC.
Recommended content
Editors’ Picks
EUR/USD holds gains above 1.1100 as USD weakens ahead of Powell
![EUR/USD holds gains above 1.1100 as USD weakens ahead of Powell](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/money-13797882_XtraSmall.jpg)
EUR/USD is consolidating weekly gains above 1.1100 in European trading on Friday. The pair draws support from the renewed US Dollar selling but the upside could be capped by the dovish ECB-speak. The focus now remains on Fed Chair Powell's speech in Jackson Hole.
GBP/USD stays firm near 1.3100, Fed/ BoE speakers eyed
![GBP/USD stays firm near 1.3100, Fed/ BoE speakers eyed](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/iStock-170160529_XtraSmall.jpg)
GBP/USD hovers near 1.3100 early Friday, in positive territory for the seventh consecutive day. Dovish Fed expectations continue to sag the US Dollar, as traders shift their focus to the speeches by Fed Chair Powell and BoE Governor Bailey at the Jackson Hole Symposium.
Gold price remains below $2,500 as traders move to the sidelines ahead of Powell's speech
![Gold price remains below $2,500 as traders move to the sidelines ahead of Powell's speech](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/stacks-of-gold-bars-19033163_XtraSmall.jpg)
Gold price attracts some dip-buying on the last day of the week and reverses a part of Thurdsay's slide of over 1% to the weekly low. The US Dollar struggles to capitalize on the overnight bounce from the YTD low amid the prospects for lower interest rates in the US.
Decentraland price is set for a rally after breaking above the descending trendline
![Decentraland price is set for a rally after breaking above the descending trendline](https://editorial.fxstreet.com/images/Markets/Currencies/Cryptocurrencies/Decentraland/Decentraland_XtraSmall.png)
Decentraland (MANA) price broke above the descending trendline and trades up 1.5% as of Friday at $0.291. Additionally, on-chain data support further price gains, as MANA's Exchange Flow Balance shows a negative spike, and the long-to-short ratio stays above one.
Does the Fed have the backbone to go big?
![Does the Fed have the backbone to go big?](https://editorial.fxstreet.com/images/Macroeconomics/CentralBanks/FED/Jerome_Powell4_XtraSmall.jpg)
Investors are banking on a steep 1% in Fed rate cuts by the time they’re hanging up their holiday stockings, but today, they’re left wondering: Does Chair Powell have the backbone to go big with preemptive rate cuts to dodge a downturn?
Moneta Markets review 2024: All you need to know
![Moneta Markets review 2024: All you need to know](https://editorial.fxstreet.com/images/IT/Testing/Review/FXSBadgeCertifiedBackg_XtraSmall.png)
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.