TAIPEI, TAIWAN – 2023/06/01: Jensen Huang, President of NVIDIA holding the Grace hopper superchip … [+] CPU used for generative AI at supermicro keynote presentation during the COMPUTEX 2023. The COMPUTEX 2023 runs from 30 May to 02 June 2023 and gathers over 1,000 exhibitors from 26 different countries with 3000 booths to display their latest products and to sign orders with foreign buyers. (Photo by Walid Berrazeg/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
Nvidia Corp. is scheduled to report earnings after Wednesday’s close. The stock hit a record high of $149.77/share in 2024 and is currently trading near $145. The stock is prone to big moves after reporting earnings and can easily gap up if the numbers are strong. Conversely, if the numbers disappoint, the stock can easily gap down. To help you prepare, here is what the Street is expecting:
Earnings Preview
The company is expected to report a gain of $0.74/share on $32.81 billion in revenue. Meanwhile, the so-called Whisper number is a gain of $0.78/share. The Whisper number is the Street’s unofficial view on earnings.
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A Closer Look At The Fundamentals
The company’s earnings have grown nicely over the last few years. In 2020, the company made $0.15/share. In 2021, earnings jumped to $0.25. Then, in 2022 earnings grew to $0.44. In 2023, earnings slid to $0.33 before exploding higher. This year, earnings are expected to grow to $1.30 and then grow to $2.87 in 2025 and 4.25/share in 2026! That growth is largely due to the very strong demand for its A.I. and crypto related chips.
A Closer Look At The Technicals
Technically, the stock is acting very well and is only trading 3% below its record high. The stock is trading above its 50 day moving average line (DMA) and above its longer-term 200 day moving average line which are both healthy signs. Furthermore, the stock is perched below resistance and can easily gap up to new highs if earnings are strong. Conversely, the bears want to see it gap down and fall if earnings fail to impress.
True Market Leader = Remarkable Stock
The stock has has established itself as a true market leader, demonstrating exceptional performance and influence across the tech sector and broader market. With its stock up around 200% year-to-date in 2024, NVIDIA has significantly outpaced the overall market, driven by its pivotal role in the artificial intelligence revolution.
Market strategists consider NVIDIA “the tell to the market,” emphasizing its influence on overall market trends. The company’s consistent outperformance, beating revenue estimates in the last several quarters, coupled with analysts’ positive long-term outlook, underscores its position as a bellwether for the tech sector and a key driver for the broader market.
Company Profile
NVIDIA Corporation provides graphics and compute and networking solutions in the United States, Taiwan, China, Hong Kong, and internationally.
The Graphics segment offers 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 or vGPU software for cloud-based visual and virtual computing; automotive platforms for infotainment systems; and Omniverse software for building and operating metaverse and 3D internet applications.
The Compute & Networking segment comprises Data Center computing platforms and end-to-end networking platforms, including Quantum for InfiniBand and Spectrum for Ethernet; NVIDIA DRIVE automated-driving platform and automotive development agreements; Jetson robotics and other embedded platforms; NVIDIA AI Enterprise and other software; and DGX Cloud software and services. The company’s products are used in gaming, professional visualization, data center, and automotive markets.
It sells its products to original equipment manufacturers, original device manufacturers, system integrators and distributors, independent software vendors, cloud service providers, consumer internet companies, add-in board manufacturers, distributors, automotive manufacturers and tier-1 automotive suppliers, and other ecosystem participants.
NVIDIA Corporation was incorporated in 1993 and is headquartered in Santa Clara, California.
Pay Attention To How The Stock Reacts To The News
From where I sit, the most important trait I look for during earnings season is how the market and a specific company reacts to the news. Remember, always keep your losses small and never argue with the tape.
Disclosure: I have a position in NVDA. The stock has been featured on FindLeadingStocks.com.
