Nvidia Q3 Preview: If it's a perfect score of 100, even scoring 99 is considered a mess.

However, trouble does not come alone. Over the weekend, 'The Information' suddenly revealed that there are overheating issues when the Blackwell processor is installed in high-capacity server racks, causing concerns among clients like Google, Meta, and Microsoft, which may affect deployment deadlines.
If there is another delay, a large-scale deployment being postponed for another quarter will indeed impact investor expectations.
This week is nvidia's FY25Q3 financial report, one of the most important reports of the year, with some divergence among market analysts.

Market expectations:
Given that the previous few quarters have all been significantly above expectations, it is definitely not appropriate to use the current market consensus as a performance comparison baseline. Not only is it mixed with outdated expectations from analysts who have not updated their forecasts in time, but also investors know that it will exceed expectations, so the expectations will be raised.
Therefore, it is necessary to compare how much the actual expectations exceed the Consensus.
Income: It has been consistently outperforming by around 2 billion in the recent quarters, so the Q3 Consensus of 33.2 billion actually equals 35.2 billion.
Also, it is necessary to look at the guidance for the next quarter. Currently, the Consensus for Q4 is 37.05 billion, meaning that guidance below 39 billion would also disappoint investors.
Taking into account the varying influence of different analysts, the views of the three analysts from UBS/GS/MS (referred to as the HAM combination) differ slightly:
1. All believe that Q3 revenue will not reach 35 billion.
Microsoft believes that Q4 will not reach 39 billion, while Goldman Sachs/UBS believe it can achieve.

Profit margin.
Currently, the market's consensus expects a gross margin of 75.02% in Q3 and 73.55% in Q4, both lower than the peak of 78.9% in Q1 this year. This is mainly due to the different costs of Blackwell and Hopper, with some impact from the yield rate.
In terms of profit margin, Nvidia has not fallen below expectations in these quarters, so if it falls below or is revised down, it will definitely be a significant blow.

Expectations for Blackwell.
Considering that the executives have already given a small hint about Blackwell's sales, saying it's in the range of 'Billion', the market expects around 2-3 billion. If it exceeds 5 billion, it will be above expectations.