In one of the most anticipated reports for investors this year, NVIDIA Corporation (NVDA) is preparing to announce its first quarter earnings after the bell on Wednesday. Wall Street analysts project impressive results, with revenue and profits expected to soar by over 200% and 400%, respectively, from the prior-year period. This surge is attributed to the company's chips experiencing high demand as the AI boom continues to gain momentum.

According to Bloomberg data, analysts anticipate NVIDIA to report adjusted earnings per share of $5.65 on revenue of $24.69 billion for the first quarter. In the same quarter of the previous year, the company reported adjusted EPS of $1.09 on revenue of $7.19 billion.

NVIDIA's stock has been on a remarkable upward trajectory, rising over 200% in the past year. Since hitting stock market lows in October 2022, its shares have skyrocketed nearly 700%. Just a day before the earnings announcement, the stock closed at a record high, emphasizing the optimism surrounding the company's performance.

The majority of NVIDIA's revenue is expected to come from its Data Center business, projected to reach $21 billion in the first quarter, a significant increase from $4.28 billion in the same period last year. The Gaming division, previously the company's largest segment, is also anticipated to see solid growth, with revenue expected to reach $3.5 billion, up from $2.24 billion in the previous year's first quarter.

Ahead of the earnings release, Stifel analyst Ruben Roy raised his price target on NVIDIA's stock price to $1,085 from $910. Roy believes that the company will once again surpass expectations and raise its guidance for the next quarter. The tremendous demand for NVIDIA's chips from major players such as Amazon, Google, Meta, and Microsoft has fueled the company's remarkable results, making this earnings report crucial to gauge the industry's appetite for further AI investment.

However, analysts express concerns over the potential impact of NVIDIA's transition from its current Hopper line of AI chips to its more powerful Blackwell line. There are fears that customers might postpone orders for Hopper chips in anticipation of Blackwell's release. Reports indicate that Amazon has already paused some orders from NVIDIA, waiting for the advanced Blackwell chips to become available. If enough customers delay their orders, NVIDIA could experience a temporary dip in sales.

In addition, NVIDIA is also facing competition from customers developing their own in-house AI chips. Tech giants like Amazon, Google, and Microsoft are moving towards using their own AI chips that offer superior power efficiency compared to NVIDIA's offerings. Although these companies may not completely abandon NVIDIA's chips, their push towards in-house products could potentially impact the chip giant's market share. Competitors such as AMD and Intel have also gained momentum with their own AI chips, posing an additional challenge for NVIDIA.

Despite these hurdles, NVIDIA remains a dominant player in the AI chip market and continues to enjoy strong demand from various sectors. As the AI revolution extends into energy and power companies, investors are keenly watching NVIDIA's earnings report to assess the industry's outlook and the company's resilience in the face of evolving competition.

Microsoft's recent announcement during its Build conference further highlighted the ongoing collaboration between major tech companies. While Microsoft confirmed its usage of AMD's MI300X chips for AI development, the company also emphasized its continued utilization of NVIDIA's chips.

As the market awaits NVIDIA's first quarter results, analysts, investors, and industry observers eagerly anticipate the company's performance amid the AI boom and its ability to maintain its leadership position in the highly competitive AI chip market.