Earnings this week: Nvidia leads AI charge

Nvidia might be at the head of the table in this week’s earnings, but with places laid for Salesforce, CrowdStrike, and Marvell Technology, we are set for a tech feast. 

These are all businesses grappling with the AI boom and how they fit into it. Nvidia and Marvell are two different sides of the microchip coin, with the former holding court as king of the castle as its hardware generates enormous demand and the latter gaining ground with its custom silicon. 

Salesforce and CrowdStrike, meanwhile, have put AI at the forefront of their software offerings and face a test of whether early signs of success will come out in the wash. 

Note: All estimates are based on data provided by Refinitiv. 

Nvidia - Rubin-esque

Earnings release: Wednesday 26 August, after market close

Revenue estimate: $91.98bn

EPS estimate: $2.09

Nvidia is this week’s main event. The chip giant is the world’s largest company by market cap, despite being briefly dethroned by Apple late last month, and approaches its earnings update after a couple of tremors in the broader AI infrastructure trade.

As the public face of the new tech boom, investors of all shapes and sizes will be sniffing around this week’s update. So, what will success smell like?

Well, context is important, as Nvidia’s numbers have been staggering. 

Back in Q1, the company topped analyst expectations as revenue jumped 85% year-on-year (YoY) to $81.6bn. Data centre revenue accounted for the lion’s share of sales, having risen by 92% to $75.2bn. 

The business continued to be extremely profitable, as a massive 74.9% gross margin sent operating income 147% higher YoY to $53.5bn. 

Looking to the now, the company’s outlook pegged Q2 revenues within 2% of $91.0 billion, while non-GAAP gross margin is seen as falling within 50 basis points of 75%. 

That’s all well and good, but the reality is that meeting and exceeding this guidance, or even Wall Street consensus expectations, may not be enough for any kind of short-term jump in share price.

Nvidia’s share price declined in the trading session immediately following each of its last four earnings updates, including a 1.8% decline after the Q1 release. 

It’s almost as if a beat has become the baseline expectation. The question is how big the beat will be.

It’s not all about the numbers, as we need to watch out for a check-in on Vera Rubin too. Vera is the next-generation hardware that’s purpose-built for agentic AI and purportedly able to deliver lower cost per token thanks to improved energy efficiency over the company’s current Blackwell architecture. 

Vera Rubin began ramping into full production during Q2, so commentary on a smooth transition and continued demand for this new product line would shore up confidence Nvidia can keep leading the charge on data centre hardware. 

But there’s a bump in the road here. 

Reports over the weekend suggested servers containing Blackwell and Vera Rubin hardware will cost more than 15% extra from early 2027 due to soaring memory costs. Are these the kind of cost increases that hyperscalers can swallow, or will spiralling infrastructure costs finally begin to temper demand?

There are a shedload of moving parts to Nvidia’s earnings, and investor expectations have almost become a millstone around its neck. So, maybe don’t expect that share price to pop even if Nvidia delivers another zinger.

CrowdStrike - Eyes on AIDR

Earnings release: Wednesday 26 August, after market close

Revenue estimate: $1.44bn

EPS estimate: $0.29

CrowdStrike is a cybersecurity business that has enjoyed impressive recent growth, positioning itself at the confluence of AI and online security. However, for many it still exists in the shadow of a disastrous 2024 software update that crashed customer systems all over the planet. 

Even so, the business has had some success in rebooting investor trust. Let’s dig into why.

Ending annual recurring revenue (ARR) is the key metric for CrowdStrike. It represents the total annual value of all customer subscriptions at the close of the period, and in Q1 it was up by 24% YoY to $5.51bn. $255.8m of this was net new ARR added during the quarter. 

So, what’s fuelling ARR?

Primarily, it's CrowdStrike’s Falcon Flex platform, which gives customers subscription access to a basket of products they can pick and choose from as their needs evolve over time. In Q1, ending ARR from Flex customers increased by over 99% YoY to over $1.9bn.

There’s another facet of the business that demands attention too. With the company’s Q1 earnings, founder and CEO George Kurtz commented:

“In Q1, the worlds of cybersecurity and frontier AI collided: this was the Mythos moment. CrowdStrike is AI security infrastructure, critical to successful AI adoption.”

This speaks to where the business is positioning itself: as a crucial player in the AI game. This isn’t just marketing bumf either, and CrowdStrike increasingly has the numbers to prove it. 

AI Detection and Response (AIDR) is a great example of this. It protects AI assets, such as models and agents, against threats like prompt interference, data leaks, and overreach. After all, while AI is changing the way businesses use tech, it creates efficiencies but also potential vulnerabilities. 

It's an offering that appears to be resonating. AIDR ARR surged by over 250% quarter-on-quarter in Q1, with Kurtz stating he had “never seen adoption this fast”. 

This all sounds thrilling, but the proof is in the pudding. If CrowdStrike can come back to the table with hard evidence of consistent momentum from AIDR, more investors may be convinced this is becoming a real growth engine.

Salesforce - Agent under fire

Earnings release: Wednesday 26 August, after market close

Revenue estimate: $11.32bn

EPS estimate: $3.27

Salesforce is a huge name in customer relationship management, or CRM for the cool kids. It makes software to handle things like marketing, customer details, interactions with customers, workflows, etc, etc.

Looking back to Q1, revenue climbed by 13% YoY to $11.1bn. On the surface, this might look fine, but tension arises from the fact $444m of this came from data management platform Informatica, which Salesforce acquired for $8bn in November of last year. 

Salesforce has assured its investors organic revenue growth will kick into gear in the second half of FY27, but will Q2 provide early evidence that Salesforce is making good on this promise?

There’s also the lingering AI question. 

Like CrowdStrike, Salesforce has been quick to boast of AI credentials, dubbing itself the “#1 Agentic CRM”. Given how AI has torn into the apparently soft underbelly of software as a service (SaaS) valuations, demonstrating that your offering can rub along with AI is critical for businesses like Salesforce. 

But, while the business is keen to brand itself ‘Number One’, there are questions about how effectively Salesforce is actually delivering its AI-enriched offering. Take its headline Agentforce product, which allows users to manage AI agents that take on tasks like customer service, workflow automation, and appointment management. 

Growth has looked impressive, with Q1 Agentforce ARR leaping by 205% YoY to $1.2bn. But reception for Agentforce is mixed. Analysis from KeyBanc showed weak feedback from some customers, while a separate TD Cowen survey found adoption among Salesforce partners remained subdued, as none saw Agentforce as a meaningful bookings driver.

ARR growth might have been rapid, but having gone all-in on Agentforce, there’s considerable pressure on Salesforce to show usage and customer satisfaction. Achieving this may require investment in product improvements, and investors will be wary of signs the business’s recently earned profitability is under threat. 

So, how can Salesforce keep everything sweet?

Salesforce needs to deliver on its full-year 34.3% non-GAAP operating margin target while also giving its headline project the resources it needs. On the face of it, Agentforce is growing extraordinarily fast, but is it actually enough of a hit with customers?

Marvell Technology - Custom silicon

Earnings release: Thursday 27 August, after market close

Revenue estimate: $2.71bn

EPS estimate: $0.92

We started with a chipstock, and we are ending with a chipstock, as Marvell Technology caps off the week to ensure we’ve gone full circle. 

Chipstocks, they both may be, but Nvidia and Marvell are vastly different in size and occupy distinct positions in the wider landscape of AI gizmos. While Nvidia is the big boss of the graphics processing unit (GPU) realm, Marvell is all about connectivity hardware and custom silicon in the form of its application-specific integrated circuits (ASICs). 

In basic terms, that means Nvidia’s chips are pre-made brains that can cogitate and compute their way through a wide range of tasks, while Marvell works with customers to build the kind of chips that can perform certain functions with optimised speed, power, or efficiency.

This offers the company serious exposure to the data centre boom. 

Q1’s record $2.42bn revenue was a 28% YoY increase, and the business said it anticipates revenue growth acceleration through every quarter in FY27. 

For Q2 specifically, the business said net revenue was likely to be within 5% of $2.7bn, with non-GAAP gross margin at between 58.25% and 59.25%.

But the biggest news for Marvell may already be out in the open. 

This is an expansion of its custom-chip partnership with Google-owner Alphabet, which is set to see the companies team up on projects around the latter’s tensor processing units (TPUs). The agreement includes revenue milestones that equate to as much as $120bn of Google purchases through FY2033 if all objectives are hit.

This may not be music to the ears of Nvidia, or frequent Google collaborator Broadcom. Hyperscalers are increasingly exploring custom silicon to reduce reliance on general-purpose GPUs, better perform specific tasks, and improve power efficiency. 

Alphabet and Marvell’s collaboration is not new, but the deepening partnership is a major vote of confidence in Marvell’s custom-silicon credentials. 

The cat is already out of the bag on this news, however, so this week it needs to report in line with already-guided headline growth in order to hold investors’ attention.