Nvidia poised for 113% revenue boom in fiscal year 2025

According to Saxo Bank analysts, Nvidia may exceed current forecasts and raise its projections for the third quarter. Garnry notes that Nvidia is set to beat the consensus and raise its forecasts for the third fiscal quarter, surpassing estimates. The expert explains that 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 earnings on Wednesday is by far the most important event in global equities. Analysts expect FY25 Q2 (ending 31 July) revenue to hit $28.7bn up 113% YoY and EBITDA of $18.9bn compared to $7.4bn a year ago, the report reads.

"Given the underlying momentum in the AI industry and the results we have seen from other companies in the AI ecosystem, we lean in direction of Nvidia beating consensus and lifting guidance for fiscal Q3 surpassing estimates. Demand is still driven by its Hopper chips H100 and H200," says Saxo Bank.

"Our view is that the AI wave will continue until the next GB200 investment has run its course as Google, Meta, and Microsoft will take another bet on compute power to see what it can create in terms of 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 was unthinkable just one month ago, but with the Harris momentum in polls (see chart) it is no longer a fantasy," the Saxo Bank analysis says.

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, a Harris victory with a divided Congress is the most likely scenario. He notes that "for now the most likely scenario is a Harris victory with a split Congress which has implications for the macroeconomy in 2025 as it would make extensions of fiscal stimulus much more difficult."

Garnry also notes the growing interest in weight loss drugs. As he emphasizes, "together with AI and European defence stocks the obesity theme has been strong this year as demand is extremely high for the new class of weight-loss drugs Wegovy from Novo Nordisk and Zepbound from Eli Lilly." 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." He adds: "this is more evidence that the new GLP-1 weight-loss drugs are preventive as much as curing and thus will likely add support for more government incentives, but also incentivizing insurance companies to increase coverage for these weight-loss drugs."

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