Nvidia Earnings: First Big Test for New CEO Colette Kress

The Nvidia earnings report due on Tuesday will be the chipmaker's first under new leadership in three decades.

Chief executive Jensen Huang resigned abruptly on Thursday after 33 years at the top.

Finance chief Colette Kress has taken over as interim chief executive.

Investors now want proof that the growth story survives without its founder.

The results cover Nvidia's fiscal third quarter.

They will land in the middle of the worst week in the company's modern history.

Analysts expect earnings growth of 90 percent on revenue of 109 billion dollars, according to LSEG data cited by Reuters.

Anything less than stellar could be punished hard by a nervous market.

Inside the company, the Nvidia earnings have become a rallying point for staff after a week of headlines.

Kress has promised employees more detail about the future at the 18 November meeting.

Nvidia earnings follow a brutal week for the shares

Nvidia shares slumped 14 percent during Thursday trading after the resignation was announced.

They touched their lowest level in nearly 16 months.

The stock pared its losses to close down 4.3 percent.

It then gained 1 percent back in after hours trade.

Retail investors bought Nvidia shares heavily on Thursday as the price fell.

Traders said the buying showed the AI trade is very much alive.

Shares of rivals AMD and Broadcom each rose about 6 percent.

Chipmaker Cerebras jumped 18 percent after lifting its sales forecast on AI demand.

Even so, the week's damage is historic.

More than 550 billion dollars of market value has been wiped off since the investigation into Huang was announced.

Nvidia's market value stood at about 4.2 trillion dollars on 11 November.

It has fallen from about 5.8 trillion dollars in early October to roughly 4 trillion dollars.

By one popular measure, the stock now trades at 12 times expected earnings.

That price to earnings ratio is the lowest in 14 years, Reuters reported.

The stock is down about 12 percent this week and more than 30 percent from its record high.

Nvidia earnings put Kress in the spotlight

Kress, who is 59, became Nvidia's finance chief in 2013.

She previously worked at Microsoft, Cisco and Texas Instruments.

People who know her describe her as a pragmatist and a calming presence.

She spent years as the one executive willing to check Huang's biggest bets.

Reuters reported that she clashed with Huang over massive and risky financing deals.

A proposed 250 billion dollar plan to support an OpenAI data centre project in Ohio was pared back to 120 billion dollars.

In a memo to employees, Kress called this an extraordinarily difficult period.

She said the company will host a meeting for staff on 18 November.

Analysts say her calm style can steady markets while the successor search runs.

But some question whether a finance chief can preserve Nvidia's appetite for technological risk.

"The interim role makes sense to keep the markets calm," said analyst Anshel Sag of Moor Insights and Strategy.

He said he does not see her as the long term visionary Nvidia needs.

Nvidia earnings and the questions investors bring

The first question on Tuesday is simple: is demand for AI chips still surging?

Nvidia's processors sit at the centre of the global build out of AI data centres.

Doubts about that spending have already made AI stocks wobble in recent weeks.

The second question is about China and export controls.

A Reuters exclusive reported that Chinese AI firms are rushing to secure Nvidia chip capacity overseas.

They fear the scandal around Huang could push Washington to tighten curbs on remote chip access.

US lawmakers from both parties are already pushing tougher restrictions on chip sales to China.

A Reuters review also found more than 3 billion dollars of Chinese projects built around restricted Nvidia processors.

The third question is who leads Nvidia permanently.

Speculation in reporting has named three possible candidates, and none is confirmed.

They are Ian Buck, the Nvidia executive who created the CUDA software system, AMD chief executive Lisa Su, and Arm boss Rene Haas.

Investors and analysts had rated Kress and Buck as the leading internal candidates.

Huang remains the company's fourth largest shareholder, with a stake of about 3.61 percent.

He will also leave the board, while former Synopsys chief Harvey Jones has become the first board chairman.

Tuesday also brings a second test for the wider AI trade.

Claude maker Anthropic is expected to start trading on the Nasdaq on Thursday, two days after the Nvidia earnings.

All of it makes the Nvidia earnings the most closely watched company report of the season.

Nvidia earnings: common questions

When are the Nvidia earnings due?

Nvidia reports its fiscal third quarter results on Tuesday, 17 November. It is the first report since Jensen Huang resigned and Colette Kress took over as interim chief executive.

What do analysts expect from the Nvidia earnings?

Analysts expect earnings growth of 90 percent on revenue of 109 billion dollars, according to LSEG data cited by Reuters. Investors will judge whether the Nvidia earnings show that sharp growth can survive without Huang.

Why do the Nvidia earnings matter so much this time?

They are the first test of Nvidia under new leadership. A weak report could deepen doubts about the AI trade, while a strong one could calm markets after a brutal week.

How did the shares react before the Nvidia earnings?

Shares slumped 14 percent intraday on Thursday to their lowest in nearly 16 months, then closed down 4.3 percent. They gained 1 percent after hours as retail investors bought the fall.

Who could become Nvidia's permanent chief executive?

Speculation in reporting names Ian Buck, AMD chief executive Lisa Su and Arm boss Rene Haas. These names are speculation only, and Nvidia says it is considering internal and external candidates.

Who is running Nvidia until a successor is chosen?

Colette Kress, the finance chief since 2013, is interim chief executive. She has written to staff about an extraordinarily difficult period and will host a company meeting on 18 November.