Nvidia Shares Diverge from Earnings Expectations, Raising Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy NVDA?
Source: seekingalpha
- Earnings Expectations Rise: Despite analysts' upward revisions of Nvidia's future earnings per share, the stock price has failed to keep pace, indicating a potential reassessment of its valuation that could impact investor confidence.
- Reasons for Price Stagnation: Portfolio managers highlight profit-taking, market volatility, and positioning pressures as potential drivers of the stock's pause, contrasting sharply with the previous two years when price gains closely tracked earnings upgrades.
- Increased Sensitivity to Execution Risks: The market has shown heightened sensitivity to execution risks, supply constraints, and intensifying competition in the AI semiconductor space, which may influence future stock performance.
- Upcoming Earnings Report: Nvidia is set to release its fourth-quarter results after the market close on Wednesday, with significant attention on whether it can surpass the increasingly high expectations, which will have a crucial impact on its stock price.
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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: 192.850
Low
200.00
Averages
264.97
High
352.00
Current: 192.850
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.
Nvidia Set to Announce Q4 Earnings Results
- Earnings Expectations: Nvidia is set to announce its Q4 earnings on February 25, with consensus EPS estimates at $1.54, reflecting a 73% year-over-year increase, and revenue estimates at $66.12 billion, up 68.1%, indicating strong growth potential.
- 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
U.S. Approves Nvidia's H200 Chip Exports to China, Shipments Delayed
- 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
Nvidia Earnings Report Sparks Caution Among Investors
- Earnings Expectations Rise: Nvidia anticipates Q4 revenue around $65 billion, while analysts expect Q1 guidance to reach $72.7 billion, indicating strong market confidence in the company's growth trajectory.
- Market Reaction Analysis: Historically, Nvidia's stock has risen after 10 of the last 16 earnings reports, with the S&P 500 following suit in 9 instances, showcasing the company's positive impact on the broader market.
- Retail Trader Enthusiasm Dims: Data from Vanda Research shows that retail buying ahead of earnings has significantly decreased, with average daily net flows at $94 million, down from $186 million prior to the November report, reflecting a cautious investor sentiment.
- Margin Pressure Risks: JPMorgan analysts highlight that high memory chip prices could pressure Nvidia's margins, adding uncertainty to future earnings performance.
See More
Market Watch: AI Impact and Stock Volatility
- Workday Stock Decline: Workday shares fell 9% this morning after issuing disappointing guidance, indicating an AI disruption threat that could lead to a secular slowdown as fewer products are billed per seat.
- HP Memory Crisis: HP Inc. anticipates double-digit unit declines in its personal computer division this year, with memory and storage costs rising from 15%-18% to 35%, resulting in a stock drop of over 5% this morning.
- Diageo Stock Plunge: Diageo shares plummeted 10% this morning after cutting its 2026 sales outlook and slashing its dividend to fund a turnaround plan under new CEO Dave Lewis, highlighting ongoing pressure in the alcohol sector.
- TJX Companies Earnings Beat: TJX Companies reported a fourth-quarter earnings beat with same-store sales up 5%, although its guidance for the future fell short of expectations, leading to only a slight premarket decline, as the management is known for underpromising and overdelivering.
See More
Nvidia Earnings Preview: Market Focus Points
- Consistent Outperformance: Nvidia has exceeded revenue estimates for 13 consecutive quarters and earnings estimates for 12 straight quarters, demonstrating the company's robust performance and steady growth, further solidifying its leadership position in the semiconductor industry.
- Market Prediction Heat: Polymarket indicates a 93% chance that Nvidia will beat EPS consensus, reflecting strong investor confidence in the company's future performance, while keywords like 'gaming' and 'automation' highlighted by Kalshi traders show high market interest in Nvidia's strategic direction.
- Keyword Analysis: Analysts expect Huang to focus on AI infrastructure buildout and trade policy, especially after the Supreme Court's ruling against Trump's tariffs, which raises market sensitivity to supply chain and pricing risks that could impact Nvidia's future strategies.
- Industry Impact: Dan Ives from Wedbush calls tonight's earnings call the most important event for global tech, emphasizing Nvidia's central role in the AI revolution, suggesting that its performance will have profound implications for the entire tech stock market.
See More
Market Dynamics and Upcoming Earnings Reports
- Economic Calendar Overview: Following the State of the Union, the economic calendar is relatively light, yet several Fed officials are scheduled to speak, keeping market focus on NVDA's upcoming earnings which may lead to price volatility.
- SPY Trading Dynamics: SPY is currently trading around 689.75; if buyers defend this level, it may push towards 692.00, and a breakout above 696.00 could signal further upside, while a drop below 689.75 may lead sellers to target 687.50.
- AAPL Price Movement: AAPL is trading around 271.50, and if buyers maintain this level, it could move towards 273.75; however, a breakdown below 271.50 may see sellers push it down to 269.75, reflecting market confidence in large-cap tech.
- NVDA Earnings Outlook: NVDA is trading at 194.00, and if it holds this level, it may spark a move towards 197.50; conversely, a drop below 194.00 could lead sellers to target 190.75, with expected volatility ahead of the earnings report.
See More
Nvidia Set to Announce Q4 Earnings Results
- Earnings Expectations: Nvidia is set to announce its Q4 earnings on February 25, with consensus EPS estimates at $1.54, reflecting a 73% year-over-year increase, and revenue estimates at $66.12 billion, up 68.1%, indicating strong growth potential.
- 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
U.S. Approves Nvidia's H200 Chip Exports to China, Shipments Delayed
- 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
Nvidia Earnings Report Sparks Caution Among Investors
- Earnings Expectations Rise: Nvidia anticipates Q4 revenue around $65 billion, while analysts expect Q1 guidance to reach $72.7 billion, indicating strong market confidence in the company's growth trajectory.
- Market Reaction Analysis: Historically, Nvidia's stock has risen after 10 of the last 16 earnings reports, with the S&P 500 following suit in 9 instances, showcasing the company's positive impact on the broader market.
- Retail Trader Enthusiasm Dims: Data from Vanda Research shows that retail buying ahead of earnings has significantly decreased, with average daily net flows at $94 million, down from $186 million prior to the November report, reflecting a cautious investor sentiment.
- Margin Pressure Risks: JPMorgan analysts highlight that high memory chip prices could pressure Nvidia's margins, adding uncertainty to future earnings performance.
See More
Market Watch: AI Impact and Stock Volatility
- Workday Stock Decline: Workday shares fell 9% this morning after issuing disappointing guidance, indicating an AI disruption threat that could lead to a secular slowdown as fewer products are billed per seat.
- HP Memory Crisis: HP Inc. anticipates double-digit unit declines in its personal computer division this year, with memory and storage costs rising from 15%-18% to 35%, resulting in a stock drop of over 5% this morning.
- Diageo Stock Plunge: Diageo shares plummeted 10% this morning after cutting its 2026 sales outlook and slashing its dividend to fund a turnaround plan under new CEO Dave Lewis, highlighting ongoing pressure in the alcohol sector.
- TJX Companies Earnings Beat: TJX Companies reported a fourth-quarter earnings beat with same-store sales up 5%, although its guidance for the future fell short of expectations, leading to only a slight premarket decline, as the management is known for underpromising and overdelivering.
See More
Nvidia Earnings Preview: Market Focus Points
- Consistent Outperformance: Nvidia has exceeded revenue estimates for 13 consecutive quarters and earnings estimates for 12 straight quarters, demonstrating the company's robust performance and steady growth, further solidifying its leadership position in the semiconductor industry.
- Market Prediction Heat: Polymarket indicates a 93% chance that Nvidia will beat EPS consensus, reflecting strong investor confidence in the company's future performance, while keywords like 'gaming' and 'automation' highlighted by Kalshi traders show high market interest in Nvidia's strategic direction.
- Keyword Analysis: Analysts expect Huang to focus on AI infrastructure buildout and trade policy, especially after the Supreme Court's ruling against Trump's tariffs, which raises market sensitivity to supply chain and pricing risks that could impact Nvidia's future strategies.
- Industry Impact: Dan Ives from Wedbush calls tonight's earnings call the most important event for global tech, emphasizing Nvidia's central role in the AI revolution, suggesting that its performance will have profound implications for the entire tech stock market.
See More
Market Dynamics and Upcoming Earnings Reports
- Economic Calendar Overview: Following the State of the Union, the economic calendar is relatively light, yet several Fed officials are scheduled to speak, keeping market focus on NVDA's upcoming earnings which may lead to price volatility.
- SPY Trading Dynamics: SPY is currently trading around 689.75; if buyers defend this level, it may push towards 692.00, and a breakout above 696.00 could signal further upside, while a drop below 689.75 may lead sellers to target 687.50.
- AAPL Price Movement: AAPL is trading around 271.50, and if buyers maintain this level, it could move towards 273.75; however, a breakdown below 271.50 may see sellers push it down to 269.75, reflecting market confidence in large-cap tech.
- NVDA Earnings Outlook: NVDA is trading at 194.00, and if it holds this level, it may spark a move towards 197.50; conversely, a drop below 194.00 could lead sellers to target 190.75, with expected volatility ahead of the earnings report.
See More
