Nvidia stock reaches new record high a day before earnings announcement.

• On Monday, Nvidia's shares rose by 2.3%, reaching an unprecedented price of $504.
• The company's fiscal third-quarter revenue growth is expected to exceed 170%, as indicated by the upcoming record.
• Any hint about the demand forecast for 2024 from Nvidia will be closely examined.

On Monday, the stock price of the company closed at an all-time high of $504, up 2.3%, before its fiscal third-quarter results are announced on Tuesday, where analysts anticipate revenue growth of over 170%.

The company's forecast for the fiscal fourth quarter, according to LSEG estimates, is expected to reveal a significant increase of almost 200%.

As the Thanksgiving holiday approaches, Wall Street will closely monitor the company that has been at the center of this year's AI growth.

In 2023, Nvidia's stock price increased by 245%, surpassing any other S&P 500 member. Its market cap now stands at $1.2 trillion, significantly higher than any other company. However, any indication on the earnings call that generative AI enthusiasm is waning, or that major customers are shifting to processors, or that China restrictions are negatively impacting the business could jeopardize the stock's recent success.

NVDA's FQ3'24 earnings call on Nov-21 will have high expectations, according to Bank of America analysts, who have a buy rating on the stock and anticipate a beat/raise.

The emergence of AMD in the generative AI market presents a new dynamic for Nvidia, which has mostly had the AI graphics processing unit (GPU) market to itself. This has raised concerns among investors about China restrictions and competitive concerns.

In the fourth quarter, AMD anticipates GPU revenue of approximately $400 million, with a projected revenue of over $2 billion in 2024. The company announced in June that its most advanced AI GPU, the MI300X, would begin shipping to select customers this year.

Despite remaining the top GPU provider for AI, Nvidia's high prices remain a concern.

The Bank of America analysts wrote that NVDA must strongly challenge the narrative that its products are unaffordable for generative AI inference.

Nvidia unveiled the H200 GPU, designed for training and deploying AI models that power generative AI, enabling companies to create intelligent chatbots and transform text into graphical designs.

The new GPU is an upgrade from the H100, the chip used by OpenAI to train its most advanced large language model, GPT-4 Turbo. H100 chips cost between $25,000 and $40,000, according to an estimate from Raymond James, and thousands of them are needed to create the biggest models in a process called "training."

Nvidia's data center group, which includes the H100 chips, experienced a 171% increase in revenue in the fiscal second quarter, totaling $10.32 billion. This represented approximately three-quarters of Nvidia's overall revenue.

According to FactSet, analysts anticipate data center growth to increase by almost four times to $13.02 billion from $3.83 billion in the fiscal third quarter. Meanwhile, LSEG, formerly Refinitiv, reports that total revenue is projected to increase by 172% to $16.2 billion.

LSEG estimates indicate that growth will peak at approximately 195% in the fiscal fourth quarter. However, expansion is expected to slow down each quarter of 2024, although it will remain robust throughout the year.

The sudden firing of CEO Sam Altman at OpenAI, the company behind ChatGPT, has sparked questions on the earnings call about the impact on Nvidia's growth.

OpenAI, a big buyer of Nvidia's GPUs, has appointed former Twitch CEO Emmett Shear to lead the company on an interim basis, with Microsoft CEO Satya Nadella joining to lead a new advanced AI research team.

Despite the potential impact of China-related concerns on its business, Nvidia investors have disregarded these concerns so far. In September 2022, Nvidia announced that the U.S. government would still allow it to develop the H100 in China, which accounts for 20% to 25% of its data center business. The H100 and A100 AI chips were the first to be hit by new U.S. restrictions last year that aimed to curb sales to China.

The company has reportedly discovered a way to continue selling in the world's second-largest economy while adhering to U.S. regulations. According to Cailian Press, the company will deliver three new chips based on the H100 to Chinese manufacturers.

Nvidia has traditionally refrained from providing annual forecasts, focusing instead on the next quarter. However, with the substantial investment inflow this year and limited opportunities for investors to track progress, they will closely monitor CEO Jensen Huang's tone on the conference call for any indication that the hype surrounding generative AI may be dissipating.

WATCH: EMJ’s Eric Jackson expects a good report from Nvidia