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Nvidia (NVDA) analysts are saying caution is warranted ahead of the release of the chipmaking giant's first-quarter earnings on Thursday.

TheStreet will be live blogging Nvidia's first-quarter earnings after the close on Thursday, April 16. Please check our home page then for more details.

The stock has risen more than 20% year to date, with the entire semiconductor sector rebounding this year after falling hard to end 2018 on concerns about slowing global economic growth. Nvidia shares, however, have declined almost 13% over the past month as rival Intel's  (INTC)  disappointing guidance for the rest of the year has weighed on the sector.

Wall Street expects first-quarter adjusted earnings from Nvidia of 81 cents a share, down 61% from a year earlier, and revenue of $2.195 billion, a 31% year-over-year decline, according to FactSet.

Here are two key factors weighing on analysts' expectations:

1. Data Center Demand

"We've lowered our FY20 estimates for Nvidia due to more dramatic slowing of data center spending and potentially lower PC GPU ASP [average selling price] in FY20 after years of increasing ASP," Stifel analyst Kevin E. Cassidy wrote in a note. "We are cautious on Nvidia shares in front of its earnings report."

Cassidy said Nvidia may have trouble meeting its current full-year guidance "primarily due to ongoing headwinds in the data center market and lower revenue from desktop gaming that may be only partially offset by higher notebook GPU sales." Analysts expect data center revenue, which comprises about 30% of Nvidia total revenue, to total $665 million in the first quarter, according to FactSet. 

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Cassidy reduced his lowered price target on Nvidia to $145 from $150, based on a 2020 earnings multiple of 25 and lowered EPS expectations. He is now expecting 2020 adjusted EPS of $5.81 vs. his earlier estimate of $6. 

Deutsche Bank analyst Ross Seymore wrote in a note that "we see the Apr-qtr report as likely in-line, however we are incrementally more cautious on the Jul-qtr guide driven by both PC (PC shortages, INTC guided 2Q down high-single digits q/q) and Datacenter (cloud digestion continuing into 2Q)." He expects 2019 revenue guidance to remain flat to slightly down year-over- year. 

BMO Capital Markets analyst Ambrish Srivastava said he was concerned about Nvidia's gaming business. "We believe the 2H bar, as is the case for several companies in our coverage that have provided 2019 guidance, is very high, particularly for the Gaming business," he said. On a very near-term basis he thinks Nvidia is "continuing to work down inventory" in gaming, a sentiment that was echoed by Deutsche Bank's Seymore. 

Longer-term, Nvidia's gaming business, which represents about 43% of revenue, isn't a sure bet, according to Seymore. "We see GPU inventory issues continuing to abate, but competitive intensity rising in GPUs long-term (Navi for AMD (AMD) in 2H19, INTC 7nm DC GPU in 2021, consumer discrete GPU in 2020)," Seymore said. 

2. Nvidia's Valuation

While the stock has posted strong gains this year, its 2019 earnings multiple of 33 is a premium valuation, one that Stifel warned against.

"With the NVDA shares trading at ~33x forward earnings, we are cautious and maintaining our Hold rating ahead of the earnings report," Cassidy said. 

Seymore said Nvidia's "growth potential is fairly reflected in its premium valuation at ~33x CY19E EPS." Nvidia trades at a blended 2019 and 2020 earnings multiple of 27, which is 46% higher than the rest of the comparable group, according to Bloomberg data. 

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