Get 40% Off
🚀 Our AI Picked 6 Stocks that Jumped +25% in Q1. Which Picks Will Soar in Q2?Unlock full list

Wall St awaits Nvidia earnings as analysts call it "Earth's most important stock"

Published 02/21/2024, 09:13 AM
Updated 02/21/2024, 09:13 AM
© Reuters. -- Nvidia (NASDAQ:NVDA) will unveil its hotly-anticipated fourth-quarter earnings after the U.S. market close on Wednesday, with analysts expecting the artificial intelligence chipmaking giant to post a more than three-fold jump in revenue.

For traders, the results could provide justification for Nvidia’s sharp run-up in valuation, currently at a forward price-to-earnings ratio of a little over 32.

But the figures may also prove to be a major check-up on a massive surge in hype around AI that has helped to underpin broader stock market strength.

"When Nvidia holds its conference call this week you will be able to hear a pin drop on trading floors across Wall Street," analysts at Wedbush said in a note to clients.

Over the much of the last year, investors have been attracted to the soaring demand for Nvidia's high-end graphics processors, which are needed to power and train AI applications. Nvidia's share price has quadrupled since the end of 2022, leaving it with a market capitalization of $1.72 trillion.

Analysts at Goldman Sachs described Nvidia as "the most important stock on planet Earth," adding that Wall Street's bar for the firm's earnings is "high."

The mania has made stocks linked to the group sensitive to any developments surrounding the business. Last week, shares in Silicon Valley firm SoundHound AI (NASDAQ:SOUN) and Israeli medical device maker Nano X Imaging (NASDAQ:NNOX) both shot up after a regulatory filing showed that Nvidia had taken stakes in the companies. Meanwhile, participation by retail investors in Nvidia is at its highest level since 2021, according to Goldman Sachs data.

Nvidia is expected to clock quarterly revenue of $20.37 billion, pushing per-share profit up to $4.58.

But there have been signs of skittishness in markets around Nvidia's ability to once again top projections -- a feat it has accomplished in the first three quarters of 2023. Questions are especially swirling around how stringent U.S. export rules could impact its operations in China, a major region that accounts for over a fifth of its total revenue.

In Asian trading on Wednesday, Japanese semiconductor testing equipment maker Advantest Corp. (TYO:6857) and TSMC (TW:2330) -- the world’s largest contract chipmaker -- declined. Both firms are major suppliers to Nvidia.

"Get the popcorn ready for Wednesday night," analysts at Wedbush wrote. "The AI [r]evolution starts with Nvidia and in our view the AI party is just getting started."

Latest comments

AI is very usefull in solar energy generation. The future world clean energy source.
I didn't know a $4.58 per share profit is thought to be good of a share trading at $669. Or did I miss some information?
You missed future growth.
More like: “Earth's most important bubble”, honestly 🤷🏻‍♂️
how abt ev burst and solar burst
who releasing this why he is not in the jail
this is good for a future film (like big short)
How long before $1000 share price?
lol heading worth good laugh
now is a good time to buy
how to invest
For sure good earning up to 1k
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.