Nvidia  (NVDA) – Get Free Report shares moved higher in pre-market trading ahead of the chipmaker’s highly-anticipated second quarter earnings slated for after the closing bell as investors look to the market leader for key guidance on AI demand.

Analysts expect Nvidia to post a bottom line of $2.09 per share for the three months ending in July, a four-fold increase from the same period last year and around 5 cents ahead of the chipmaker’s blowout spring forecast. Group revenues are expected to rise 67.6% to $11.2 billion, again topping Nvidia’s May estimate of around $11 billion.

The larger focus, however, is likely to come from Nvidia’s near-term sales guidance, expected in the range of $12.5 billion for the current quarter and $14 billion for the three months ending in December, which is likely to provide the benchmark for global demand in the rapidly-developing market for AI technology, much of it powered by Nvidia-designed chips. 

Supply chain issues, however, may cloud Nvidia’s outlook as the capacity constraints tied to chip-on-wafer-on-substrate, or CoWoS, a crucial component of AI chipmaking. The high-end packaging technology has been in high demand this year as companies such as Nvidia, Broadcom AVGO, Amazon AMZN and others ramp up production to meet surging end-market interest.

Taiwan Semiconductor, the world’s biggest chip contractor, has been struggling to meet that demand surge, forcing Nvidia — which has already secured around 40% of TSMC’s CoWoS capacity for this year — to source the high end packaging technology elsewhere, including Tempe, Arizona-based Amkor Technology and Taiwan-based United Microelectronics Corp. UMC.

Nvidia shares were marked 1.2% higher in pre-market trading to indicate a Wednesday opening bell price of $462.22 each.

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