Nvidia expected to break records, driven by AI chip demand

According to Saxo Bank analysts, Nvidia may exceed current forecasts and raise its projections for the third quarter. Garnry notes, "we lean towards the view that Nvidia will beat the consensus and raise its forecasts for the third fiscal quarter, surpassing estimates." According to the expert, demand is still driven by Hopper H100 and H200 chips.

Analysts expect the company's revenue in the second quarter of 2025 to be $28.7 billion. As Garnry emphasizes, "the estimated revenue momentum in the fourth quarter of the fiscal year 2025 (ending January 31, 2025) is still high and has increased from about $25 billion at the beginning of the year to $35 billion currently."

Nvidia's results on Wednesday will be the most important event on the global stock market. Analysts expect the company's revenue in the second quarter of the fiscal year 2025 (ending July 31) to be $28.7 billion, representing a 113 percent increase compared to the previous year, with an EBITDA of $18.9 billion compared to $7.4 billion last year, the report reads.

"Considering the momentum in the artificial intelligence industry and the results of other firms in the AI ecosystem, we lean towards the view that Nvidia will beat the consensus and raise its forecasts for the third fiscal quarter, surpassing estimates. Demand is still driven by Hopper H100 and H200 chips," says Saxo Bank.

"We believe that the AI wave will persist until the investment in GB200 is completed, and Google, Meta, and Microsoft undertake actions related to computing power to test their capabilities regarding models and new AI applications," explains Saxo Bank.

Garnry highlights a possible "Blue sweep" scenario in the upcoming U.S. elections, though he assesses its likelihood at just 10 percent. "The 'Blue sweep' scenario (where the Democratic Party gains control of the presidency, Senate, and House of Representatives) was unthinkable a month ago, but with the momentum achieved by Harris in the polls, it has stopped being just a fantasy," the Saxo Bank analysis reads.

According to Garnry, the realization of this scenario could lead to corporate tax hikes, which would negatively impact stock markets and company valuations. "Harris and the Democratic Party could more easily implement corporate tax increases from 21 percent to 28 percent and simply cut a significant portion of post-tax free cash flows," writes the Saxo Bank strategist.

However, according to Garnry, the most likely scenario remains a Harris victory with a divided Congress. As he notes, "currently, the most likely scenario is still a Harris victory with a divided Congress, which would impact the macroeconomic outlook in 2025, as it would significantly hinder the expansion of budgetary expenditures."

Garnry also notes the growing interest in weight loss drugs. As he emphasizes, "alongside stocks from the AI industry and the European defence sector, the topic of obesity drugs has been one of the most popular this year." The Saxo Bank strategist notes that a new study of Eli Lilly's Zepbound drug showed promising results in preventing diabetes.

According to Garnry, "the study showed that patients using Zepbound compared to the control group had a 94 percent lower likelihood of developing the disease." As he notes, "this is further evidence that new weight loss drugs from the GLP-1 group have preventive properties, not just therapeutic ones, which will likely increase government incentives for the development of the sector and prompt insurance companies to expand their scope of activities in this field."

Garnry predicts that this success could lead to greater support from the government and the insurance sector, further increasing interest in the obesity drugs market, strengthening their position alongside stocks from the AI and defence sectors.