Breakfast News: Spotlight On Nvidia's Q1
May 28, 2025
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Source: Image created by Jester AI.
1. Nvidia Earnings Excitement Builds
The highly anticipated first-quarter report from Nvidia (NVDA 3.00%) will arrive after today's closing bell, with new optimism erasing the stock's 2025 loss on earlier trade war fears. According to Bloomberg, U.S. revenue is predicted to rise 60% to $21.6 billion, with total revenue reaching $43.3 billion.
- "$15 billion H20 revenue hit on a rolling 12-month basis": David O'Connor at BNP Paribas wrote of the potential impact of U.S. government restrictions on the export of Nvidia's H20 chips, as the company expects a resulting $5.5 billion writedown. Analysts expect $6.2 billion revenue from China this quarter.
- "The market opportunity in Saudi Arabia and UAE alone could over time add another $1 trillion": Wedbush analyst Dan Ives sees a big boost to the global AI market from the Middle East, with Saudi Arabia set to buy 18,000 Nvidia chips for its Humain project, while the UAE plans to build "the largest AI data center outside the U.S."
2. Okta Falls 13% on Cautious Guidance
Okta (OKTA 0.36%) plunged in pre-market trading, after management warned of macroeconomic uncertainty in a Q1 update. The company saw its net retention rate drop by 5 percentage points from a year ago, but still at 106%. CEO Todd McKinnon reported increasing caution from customers facing the potential impact of tariffs.
- Revenue and earnings beat guidance: Revenue grew by 12% with adjusted earnings per share up 32% over the same quarter last year. The identity verification specialist reported a 20% rise in customers spending at least $1 million annually.
- Beating the S&P 500 by 190% since January 2018 Stock Advisor recommendation: The company spoke of a "prudent approach" to guidance in the face of economic uncertainty. But it maintained full-year guidance of revenue between $2.85 billion and $2.86 billion and earnings between $3.23 and $3.28 – at least for now.
3. Next Up: Afternoon Earnings from CRM, VEEV, ELF
Analysts expect a 6.8% revenue rise year over year from Salesforce's (CRM -3.43%) Q1 results later, down from 10.7% in Q1 2024. Focus is on the company's Agentforce AI tools, as CEO Marc Benioff sees a "$12 trillion opportunity" in digital labor.
- "Results ahead of guidance for all metrics": Veeva (VEEV 18.87%) CFO Brian Van Wagener spoke of a strong fiscal 2025 after a Q4 earnings beat. In today's Q1 results, analysts expect revenue near the top end of guidance of $726 million to $729 million. Watch for innovation and strategic partnerships.
- Fiscal 2025 outlook cut: Hidden Gems rec e.l.f. Beauty (ELF 23.38%) will report Q4 after missing Q3 earnings expectations with zero growth and lowering FY guidance. Combined with 31% revenue growth, it suggests shareholders will be watching for cost control, though analysts don't expect any earnings improvement this quarter.
4. Rule Breakers: CRM's Responsible Deal
Tim Beyers
Let's be clear: I can't tell you whether Salesforce acquiring Informatica (NYSE:INFA) will work out. But the structure of the deal is a relief. Salesforce is paying about $8 billion in cash, or $25 a share. That's good news. The company used to make only cash acquisitions – that appeared to change with the $27.7+ billion purchase of Slack from 2020, in which Salesforce used billions of its own equity to fund the acquisition. Not here, though. And again, that's good: Salesforce has $14 billion in cash and investments on its balance sheet and can afford to pay cash. It's also better for shareholders.
5. Your Take
Veeva, e.l.f. Beauty, and Pure Storage (PSTG -3.12%) – also reporting today – have all been recommended in Stock Advisor over the past few years.
Which of the three do you think has the best chance of beating the market over the next 5 years, and why? Debate with friends and family, or become a member to hear what your fellow Fools are saying.
