Tech Stocks Outperform Market with Strong Returns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy NVDA?
Source: Fool
- Nvidia's AI Chip Demand: Nvidia's net income reached $31.9 billion, up 65% year-over-year, indicating strong demand in the AI chip market, positioning it to potentially become the world's most profitable publicly traded company and solidifying its market leadership.
- Micron's Strategic Shift: Micron reported a 57% year-over-year revenue increase in Q1 FY26 and has exited the consumer market to focus on AI infrastructure, suggesting significant strategic importance and anticipated revenue acceleration and profit growth in upcoming quarters.
- Amazon's Potential Rally: Despite Amazon's flat stock performance over the past year, its online advertising and cloud services showed year-over-year growth rates of 14% and 24%, respectively, highlighting strong fundamentals, with Morgan Stanley raising its price target to $300, indicating a potential stock rebound ahead.
- Market Focus on Tech Stocks: As tech stocks demonstrate robust performance, investor interest in companies like Nvidia, Micron, and Amazon is rising, particularly due to ongoing growth in AI and cloud computing, which may attract more mainstream investors moving forward.
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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's Q4 Results Exceed Expectations Significantly
- Strong Performance: Nvidia reported an adjusted earnings per share of $1.62 for the quarter ending January 25, with revenue soaring 73% year-over-year to $68.13 billion, significantly exceeding Wall Street's forecast of $65.91 billion, indicating robust market demand and execution.
- Data Center Revenue Surge: Data center revenue reached $62.13 billion, surpassing expectations of $60.36 billion, reflecting a surge in enterprise demand for AI computing, further solidifying Nvidia's leadership in the AI sector.
- Optimistic Outlook: The company anticipates revenue of $78 billion for the upcoming fiscal first quarter, excluding any revenue from China, showcasing confidence in global markets while also indicating a cautious stance towards the Chinese market.
- Dividend Announcement: Nvidia declared a quarterly dividend of $0.01 per share to be paid on April 1, enhancing investor confidence and demonstrating the company's ability to return value to shareholders supported by strong cash flow.
See More
Analysts Claim Nvidia is Massively Undervalued
- Market Underestimation: Dan Ives from Wedbush Securities pointed out that Wall Street analysts have severely underestimated Nvidia's valuation, particularly ahead of the upcoming fourth-quarter earnings report, indicating a neglect of the company's potential.
- Surge in AI Demand: Ives emphasized that with the skyrocketing demand for artificial intelligence, Nvidia's chips play a crucial role in driving the AI revolution, making its future earnings pivotal.
- Performance Expectations: Ives anticipates a 'gold medal performance' from Nvidia, reflecting not only his confidence in the company's strong earnings but also potentially influencing investor perceptions of its stock.
- Stock Price Reaction: At the time of writing, Nvidia's shares were trading 2% higher, indicating a positive market response to the optimistic expectations surrounding the upcoming earnings report and analyst sentiments.
See More
Nasdaq Futures Decline as Nvidia Warns of Chinese Competitors
- Nvidia Earnings Impact: Nvidia reported Q4 revenue of $68.13 billion, exceeding estimates, and guided Q1 sales to approximately $78 billion; however, CFO Colette Kress warned of no assumed revenue from China data centers and noted that Chinese competitors are making progress, which could impact Nvidia's global competitiveness.
- Market Sentiment Fluctuations: Despite Nvidia's strong earnings report, the market reacted negatively due to concerns over competition from China, leading Nasdaq 100 futures to decline by 0.3%, while S&P 500 and Dow futures fell by 0.1% and 0.2%, respectively, indicating investor uncertainty about the future.
- Geopolitical Pressures: The U.S. imposed sanctions on over 30 entities supporting Iranian oil and weapons sales, increasing pressure ahead of the Geneva nuclear talks, while Trump pushed for a global tariff increase to 15%, further exacerbating market anxiety.
- Divergent Stock Performances: Nvidia rose 0.2% in after-hours trading, while The Trade Desk plunged 16% due to first-quarter revenue guidance falling short of Wall Street expectations, highlighting a stark contrast in market reactions and reflecting investor caution regarding future performance.
See More
Major U.S. Stock Indexes Rise, Tech Stocks Shine
- Nasdaq Strong Performance: The Nasdaq index rose nearly 1.3% to close at 23,152.07, reflecting strong investor interest in tech stocks, which may attract more capital inflows into the sector amid an overall positive market backdrop.
- Nvidia Beats Earnings Expectations: Nvidia shares increased by 1.44% to $195.62, with first-quarter revenue guidance of $76.44 billion to $79.56 billion exceeding market expectations of $71.96 billion, indicating robust demand in the data center market despite excluding revenue from China.
- Snowflake Revenue Growth: Snowflake's stock surged 5.09% to $169.21, reporting fourth-quarter revenue of $1.28 billion, up 30% year-over-year and above estimates, showcasing strong performance in the cloud computing market with expectations for continued product revenue growth.
- IonQ Revenue Surge: IonQ shares climbed 6.3% to $33.59, with fourth-quarter revenue of $61.89 million, up 429% year-over-year and above estimates, indicating strong growth potential in the quantum computing sector as future quarters are expected to maintain this momentum.
See More
Nvidia's Earnings Exceed Expectations, AI Boom Continues
- Significant Revenue Growth: Nvidia's Q4 fiscal 2026 revenue surged 73% year-over-year to $68.13 billion, surpassing the market expectation of $66.2 billion, indicating robust and sustained demand for AI technologies, thereby reinforcing its market leadership.
- Adjusted EPS Increase: Adjusted earnings per share (EPS) rose 82% to $1.62, exceeding the consensus estimate of $1.53, reflecting strong performance in cost management and product demand, which enhances investor confidence.
- Optimistic Guidance: Management forecasts Q1 fiscal 2027 revenue to reach $78 billion, significantly above the market expectation of $72.6 billion, demonstrating strong confidence in future growth, particularly in the data center and AI sectors.
- Strong Data Center Performance: Data center revenue grew 75% year-over-year to $62.3 billion, exceeding the anticipated $60.7 billion, indicating success in diversifying its customer base and reducing reliance on any single large customer, thus mitigating future spending risks.
See More
Jensen Huang Comments on Anthropic and U.S. Defense Dispute
- Defense Contract Dispute: U.S. Defense Secretary Pete Hegseth has given Anthropic until Friday to loosen its AI tool usage rules or risk losing its $200 million contract, highlighting the government's stringent oversight of AI technology usage.
- Reasonable Perspectives: Jensen Huang stated that both the Defense Department and Anthropic have reasonable viewpoints regarding the use of the Claude model, emphasizing the balance between technology usage and marketing, reflecting the complex compliance challenges faced by the AI industry.
- Negotiation Stalemate: Anthropic seeks assurances that its models will not be used for autonomous weapons or mass surveillance of Americans, while the Defense Department demands agreement to “all lawful use cases,” indicating a divergence in ethical and legal frameworks between the two parties.
- Market Competition Landscape: Huang noted that even if negotiations between Anthropic and the Defense Department fail, there are other AI companies in the market, indicating fierce competition in the AI sector and that the Defense Department is not the only customer, which could impact Anthropic's market positioning.
See More
Nvidia's Q4 Results Exceed Expectations Significantly
- Strong Performance: Nvidia reported an adjusted earnings per share of $1.62 for the quarter ending January 25, with revenue soaring 73% year-over-year to $68.13 billion, significantly exceeding Wall Street's forecast of $65.91 billion, indicating robust market demand and execution.
- Data Center Revenue Surge: Data center revenue reached $62.13 billion, surpassing expectations of $60.36 billion, reflecting a surge in enterprise demand for AI computing, further solidifying Nvidia's leadership in the AI sector.
- Optimistic Outlook: The company anticipates revenue of $78 billion for the upcoming fiscal first quarter, excluding any revenue from China, showcasing confidence in global markets while also indicating a cautious stance towards the Chinese market.
- Dividend Announcement: Nvidia declared a quarterly dividend of $0.01 per share to be paid on April 1, enhancing investor confidence and demonstrating the company's ability to return value to shareholders supported by strong cash flow.
See More
Analysts Claim Nvidia is Massively Undervalued
- Market Underestimation: Dan Ives from Wedbush Securities pointed out that Wall Street analysts have severely underestimated Nvidia's valuation, particularly ahead of the upcoming fourth-quarter earnings report, indicating a neglect of the company's potential.
- Surge in AI Demand: Ives emphasized that with the skyrocketing demand for artificial intelligence, Nvidia's chips play a crucial role in driving the AI revolution, making its future earnings pivotal.
- Performance Expectations: Ives anticipates a 'gold medal performance' from Nvidia, reflecting not only his confidence in the company's strong earnings but also potentially influencing investor perceptions of its stock.
- Stock Price Reaction: At the time of writing, Nvidia's shares were trading 2% higher, indicating a positive market response to the optimistic expectations surrounding the upcoming earnings report and analyst sentiments.
See More
Nasdaq Futures Decline as Nvidia Warns of Chinese Competitors
- Nvidia Earnings Impact: Nvidia reported Q4 revenue of $68.13 billion, exceeding estimates, and guided Q1 sales to approximately $78 billion; however, CFO Colette Kress warned of no assumed revenue from China data centers and noted that Chinese competitors are making progress, which could impact Nvidia's global competitiveness.
- Market Sentiment Fluctuations: Despite Nvidia's strong earnings report, the market reacted negatively due to concerns over competition from China, leading Nasdaq 100 futures to decline by 0.3%, while S&P 500 and Dow futures fell by 0.1% and 0.2%, respectively, indicating investor uncertainty about the future.
- Geopolitical Pressures: The U.S. imposed sanctions on over 30 entities supporting Iranian oil and weapons sales, increasing pressure ahead of the Geneva nuclear talks, while Trump pushed for a global tariff increase to 15%, further exacerbating market anxiety.
- Divergent Stock Performances: Nvidia rose 0.2% in after-hours trading, while The Trade Desk plunged 16% due to first-quarter revenue guidance falling short of Wall Street expectations, highlighting a stark contrast in market reactions and reflecting investor caution regarding future performance.
See More
Major U.S. Stock Indexes Rise, Tech Stocks Shine
- Nasdaq Strong Performance: The Nasdaq index rose nearly 1.3% to close at 23,152.07, reflecting strong investor interest in tech stocks, which may attract more capital inflows into the sector amid an overall positive market backdrop.
- Nvidia Beats Earnings Expectations: Nvidia shares increased by 1.44% to $195.62, with first-quarter revenue guidance of $76.44 billion to $79.56 billion exceeding market expectations of $71.96 billion, indicating robust demand in the data center market despite excluding revenue from China.
- Snowflake Revenue Growth: Snowflake's stock surged 5.09% to $169.21, reporting fourth-quarter revenue of $1.28 billion, up 30% year-over-year and above estimates, showcasing strong performance in the cloud computing market with expectations for continued product revenue growth.
- IonQ Revenue Surge: IonQ shares climbed 6.3% to $33.59, with fourth-quarter revenue of $61.89 million, up 429% year-over-year and above estimates, indicating strong growth potential in the quantum computing sector as future quarters are expected to maintain this momentum.
See More
Nvidia's Earnings Exceed Expectations, AI Boom Continues
- Significant Revenue Growth: Nvidia's Q4 fiscal 2026 revenue surged 73% year-over-year to $68.13 billion, surpassing the market expectation of $66.2 billion, indicating robust and sustained demand for AI technologies, thereby reinforcing its market leadership.
- Adjusted EPS Increase: Adjusted earnings per share (EPS) rose 82% to $1.62, exceeding the consensus estimate of $1.53, reflecting strong performance in cost management and product demand, which enhances investor confidence.
- Optimistic Guidance: Management forecasts Q1 fiscal 2027 revenue to reach $78 billion, significantly above the market expectation of $72.6 billion, demonstrating strong confidence in future growth, particularly in the data center and AI sectors.
- Strong Data Center Performance: Data center revenue grew 75% year-over-year to $62.3 billion, exceeding the anticipated $60.7 billion, indicating success in diversifying its customer base and reducing reliance on any single large customer, thus mitigating future spending risks.
See More
Jensen Huang Comments on Anthropic and U.S. Defense Dispute
- Defense Contract Dispute: U.S. Defense Secretary Pete Hegseth has given Anthropic until Friday to loosen its AI tool usage rules or risk losing its $200 million contract, highlighting the government's stringent oversight of AI technology usage.
- Reasonable Perspectives: Jensen Huang stated that both the Defense Department and Anthropic have reasonable viewpoints regarding the use of the Claude model, emphasizing the balance between technology usage and marketing, reflecting the complex compliance challenges faced by the AI industry.
- Negotiation Stalemate: Anthropic seeks assurances that its models will not be used for autonomous weapons or mass surveillance of Americans, while the Defense Department demands agreement to “all lawful use cases,” indicating a divergence in ethical and legal frameworks between the two parties.
- Market Competition Landscape: Huang noted that even if negotiations between Anthropic and the Defense Department fail, there are other AI companies in the market, indicating fierce competition in the AI sector and that the Defense Department is not the only customer, which could impact Anthropic's market positioning.
See More
