Nvidia Earnings Preview: Market Anticipation Builds
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 12 hours ago
0mins
Should l Buy NVDA?
Source: Benzinga
- Pivotal Earnings Moment: Wedbush analyst Dan Ives highlights that Nvidia's earnings report comes at a crucial time for the tech sector, with expectations to exceed market estimates, potentially boosting overall market sentiment.
- Strong Revenue Forecast: Analysts predict Nvidia's fourth-quarter revenue will reach $65.64 billion, a significant increase from $39.33 billion in the same quarter last year, reflecting robust demand for AI chips.
- Market Multiplicative Effect: Ives notes that every dollar spent on Nvidia could yield an $8 to $10 multiplier for the entire tech ecosystem, further solidifying its dominant position in the AI revolution.
- Stock Performance: Nvidia's stock rose 0.58% to $192.61 on Tuesday, with a year-to-date increase of 3.27%, indicating strong market confidence in its future performance.
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Analyst Views on NVDA
Wall Street analysts forecast NVDA stock price to rise
41 Analyst Rating
39 Buy
1 Hold
1 Sell
Strong Buy
Current: 191.550
Low
200.00
Averages
264.97
High
352.00
Current: 191.550
Low
200.00
Averages
264.97
High
352.00
About NVDA
NVIDIA Corporation is a full-stack computing infrastructure company. The Company is engaged in accelerated computing to help solve the challenging computational problems. The Company’s segments include Compute & Networking and Graphics. The Compute & Networking segment includes its Data Center accelerated computing platforms and artificial intelligence (AI) solutions and software; networking; automotive platforms and autonomous and electric vehicle solutions; Jetson for robotics and other embedded platforms, and DGX Cloud computing services. The Graphics segment includes GeForce GPUs for gaming and PCs, the GeForce NOW game streaming service and related infrastructure, and solutions for gaming platforms; Quadro/NVIDIA RTX GPUs for enterprise workstation graphics; virtual GPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems, and Omniverse Enterprise software for building and operating industrial AI and digital twin applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Product Line Expansion: Analyst Jeff Pu expects Nvidia to launch a language processing unit (LPU) at the GTC event to enhance its inferencing product portfolio, along with a potential CPO for scale-out switches, demonstrating the company's ongoing innovation in the AI sector.
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- Market Reaction: BNP Paribas anticipates a 'classic beat/raise' for the quarter but does not expect significant market-moving news until the GTC conference in March, suggesting investors should focus on future product announcements.
- Product Line Expansion: Analyst Jeff Pu expects Nvidia to launch a language processing unit (LPU) at the GTC event to enhance its inferencing product portfolio, along with a potential CPO for scale-out switches, demonstrating the company's ongoing innovation in the AI sector.
- Industry Impact: Despite Nvidia's consistent earnings beats over the past two years and a stock price increase of over 48% in the last year, concerns about its slowing growth rate may affect the stock performance of other semiconductor companies.
See More
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- Export Approval Status: Although the Trump administration granted Nvidia approval to export its H200 chips to China last December, Commerce Assistant Secretary David Peters stated that no shipments have occurred yet, highlighting the complexities and potential delays in the export process.
- Chinese Market Preparation: Chinese officials have allowed major tech companies like Alibaba, Tencent, and ByteDance to prepare orders, with expectations of hundreds of thousands of H200 chips being ordered, indicating strong demand for AI chips in the Chinese market.
- National Security Considerations: Trump noted on social media that the export conditions would ensure continued strong national security for the U.S., reflecting that national security remains a critical factor in U.S.-China trade relations.
- Market Reaction Expectations: Despite the order preparations, the delay in chip shipments may impact Nvidia's market performance, particularly as investors closely watch its upcoming earnings report for performance expectations.
See More
Amazon's Earnings Report Highlights and Challenges
- Capital Expenditure Plans: Amazon plans to invest $200 billion in capital expenditures over the coming years, which has raised investor concerns but also reflects the company's confidence in future growth prospects.
- Custom Chip Growth: Amazon's custom chips, Graviton and Trainium, have surpassed a run rate of $10 billion in annual revenue, doubling year-over-year, and could be valued at $100 billion if treated as a standalone business, highlighting their strong performance in the cloud computing market.
- Core Cloud Capabilities: CEO Andy Jassy noted that Amazon is adding significant EC2 core computing capacity daily, with most of it utilizing Graviton, indicating ongoing investment and technological advantages in its cloud infrastructure.
- Arm's Revenue Growth: Arm Holdings generates over $1 billion in quarterly revenue, and with the success of Graviton, its data center royalty revenue is expected to surpass smartphone revenue in the next three years, showcasing its potential growth opportunities in the AI sector.
See More
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- Fear Index Eases: The CNN Money Fear & Greed Index recorded a reading of 42.7 on Tuesday, up from 37, indicating a slight improvement in market sentiment while still remaining in the 'Fear' zone, suggesting caution among investors.
- Positive Stock Performance: On Tuesday, U.S. stocks generally rose, with the Nasdaq Composite gaining approximately 1% to close at 22,863.68, reflecting increased investor confidence particularly in technology, consumer discretionary, and industrial sectors.
- Housing Price Index Increase: The FHFA house price index rose by 0.1% in December, a slowdown from the revised 0.7% increase in November, while the S&P Case-Shiller home price index increased by 1.4% year-over-year, indicating stability in the housing market.
- Sector Performance Divergence: Most sectors in the S&P 500 closed positively, with consumer discretionary, information technology, and industrial stocks leading gains, while energy and healthcare stocks fell, highlighting varying levels of investor confidence across different sectors.
See More
U.S. Stock Futures Slightly Up, Investors Eyeing Specific Stocks
- Market Dynamics: U.S. stock futures are slightly up this Wednesday morning, reflecting a cautiously optimistic sentiment among investors, which may influence trading strategies for the day.
- Investor Focus: While specific stocks are not mentioned, there is a general expectation that certain equities will attract investor attention, potentially leading to increased trading volumes.
- Data Source: Market news and data are provided by Benzinga APIs, ensuring timely and accurate information to assist investors in making informed decisions.
- Investment Advisory: Benzinga encourages investors to check their premarket coverage for the latest market dynamics and stock performances, although they do not provide specific investment advice.
See More
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- Economic Performance Rating: In his State of the Union address, Trump claimed that the U.S. economy has returned to a 'golden age,' yet only 39% of U.S. adults approved of his economic management according to AP-NORC polling, indicating public skepticism about his economic policies.
- Tariff Policy Impact: Trump attributed the 'roaring' American economy to tariffs; however, the recent Supreme Court ruling that overturned tariffs central to his economic strategy constrains his trade policy options, potentially leading to adjustments in economic policy.
- Claims on International Conflicts: Trump asserted that he has stopped eight wars since taking office, a claim widely disputed, reflecting the contentious and uncertain nature of his foreign policy, which may affect his support in the upcoming midterm elections.
- Lack of New Initiatives: While reiterating familiar policies and goals, Trump's speech lacked new initiatives, which could lead to declining voter confidence in his future policies, especially with midterm elections approaching.
See More
