Nvidia Corp. is set to report another strong financial result on Wednesday, with Wall Street beginning to expect more results from the chip giant.
Perhaps that’s the reason for Nvidia’s stock price
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We were sliding into the worst day for the report in over a year. The stock fell 6.2% in Tuesday afternoon trading, on track to record its biggest single-day decline since Dec. 27, 2022, when it fell 7.1%.
According to Dow Jones Market Data, Nvidia is on pace to lose $112 billion in market capitalization that day, the largest single-day decline in market capitalization in the company’s history. That’s double the $56 billion decline seen in March. 2023.
The daily decline is expected to be more than the market capitalization of other major chip companies, including Micron Technology.
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($88 billion) and Analog Devices, Inc.
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($93 billion).
MarketWatch details: These three European chip names could benefit as Nvidia prepares to release earnings, JPMorgan says
HSBC analyst Frank Lee said: “Given the rise in NVIDIA’s stock price since the beginning of the year, we believe that consensus earnings are closer to our forecasts and that broader market expectations have risen significantly.” Stated. Nvidia stock has soared more than 35% so far this year.
“We believe there is limited scope for further earnings upside in 2024 relative to the revenue and profit surprises seen in 2023,” Lee and his team said.
Analysts tracked by FactSet expect Nvidia to post adjusted earnings of $4.59 per share on revenue of $20.4 billion in the fiscal fourth quarter that ended in January. Adjusted earnings per share are expected to increase by more than 400%, and sales could more than triple his.
The company is expected to see similarly impressive numbers this quarter, with analysts predicting adjusted EPS of more than 350% to $5.02 per share and revenue of about It is modeled at $22.2 billion, which is three times that amount.
Jordan Klein, a desk-based analyst at Mizuho, said Nvidia’s structure appears to be “very high hurdles” and “challenging.” “I feel there’s a much greater chance that stocks will go down than up,” he continued, but he plans to judge this quarter because it’s likely “a mistake to do so.” He also said that there was no such thing. € for Nvidia.
Piper Sandler analyst Harsh Kumar said the company is forecasting data center revenue of $400 million to $500 million above consensus estimates, representing about 10% growth on a quarter-over-quarter basis. He said that it would mean.
“However, if this outcome materializes, the stock price would remain flat given the recent rally over the past two months and very high expectations for print,” he wrote.
See also: 3 AI ‘enabler’ stocks to consider as Nvidia springs new surprises
What is interesting is NVIDIA’s view on the Chinese market. Although the company faces restrictions on sales to China from the Department of Commerce, it continues to work on modifying its products to sell there.
“Importantly, this guide will likely not include revenue from newly developed chips for China,” Kumar wrote. “With reports late last year that new export-compliant chips were in development, we believe this revenue stream could pick up in the April quarter.”
Morgan Stanley’s Joseph Moore said some believe Nvidia’s guidance could lead to quarterly sales of more than $25 billion, but that “sales could get there.” , he and his team are
At least initially, the guidance will be more conservative than that. ”
Moore doesn’t foresee a “strong immediate reaction” to NVIDIA’s positive news, but he also doubts the stock will sell.
“Our conversations with investors are primarily constructive customer conversations about stocks, but we are concerned about short-term expectations being too high, which usually creates a benign situation.” he writes.
read: By this metric, NVIDIA is expected to be the best performer on the S&P 500 through 2025
Raymond James’ Srini Pajuri commented that any “short-term decline” in Nvidia stock is likely to be “short-lived.”
He was optimistic about the company’s future B100 products, predicting “rapid rollout,” noting that “the processing power needed for AI shows no signs of slowing down.”
Overall, he expects Amazon.com to:
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After Meta Platforms Inc., it will be a “near-term driver.”
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and Microsoft
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It’s been a big customer for the past few quarters.
