2024-02-20 17:35:00
Shares of the chip giant NVIDIA COR -5.61% Close:0 Open:719.41 High:719.44 Low:677.34 Turnover:– Page Quote News Graphs Company profile Recommendations More articles on the subject: Trading with lower prices, when it seems that the market is taking a more cautious approach towards results The company tomorrow after closing. If the declines in Nvidia stock hold, it will be the biggest one-day decline since May 2023.
Wall Street expects the company to report earnings per share of $4.59 on revenue of $20.4 billion for the quarter.
Nvidia shares received another recommendation upgrade this week, after HSBC analyst Frank Lee raised his target price to $835 from $800 and maintained his buy recommendation, while reducing expectations for an increase in profits and now predicting that the company’s revenues will be in line with consensus estimates. “We believe that general market expectations have risen significantly as consensus earnings are now approaching our forecasts. We see limited upside to earnings in 2024, combined with surprises in 2023,” the analyst wrote.
Among the main topics that Nvidia’s management may be asked about in the earnings call is the growing competition from companies like AMD, especially while the market is looking for chips that will allow models to draw conclusions or provide answers, in addition to training the models on large databases. “As inference workloads continue to come into focus, we would expect more pricing concerns given AMD’s situation,” the analysts said.
Nvidia holdings in artificial intelligence companies
Shares of smaller AI companies jumped last week after the chip giant revealed its holdings and hinted at its growth strategy. According to the 13F form submitted by the company to the US Securities and Exchange Commission, which details the holdings in shares traded in the US, the largest investment of the artificial intelligence leader is in the chip designer Arm with 147.3 million dollars.
In addition, Nvidia also invested almost 76 million dollars in the biotech company Recursion Pharmaceuticals, 3.7 million dollars in the company SoundHound, which develops voice assistants, and purchased a stake in the company Nanox Nanox -24.21% Close: 0 Open: 10.9 High: 11 Low: 8.9 Turnover:– to the page News quote Graphs Company profile Recommendations Additional articles on the subject: The Israeli company, which uses AI for innovative medical imaging and develops a portable and cheap x-ray. The chip maker also invested in autonomous driving, with a $3 million investment in the TuSimple company.
Wall Street estimates that Nvidia’s holdings in a wide variety of AI companies can help the company produce cheaper, more focused chips instead of expensive chips used for a wide variety of applications.
The most traded stock
The Nvidia share recently replaced the Tesla share TESLA INC -4.21% Close:0 Open:196.21 High:198.6 Low:189.14 Cycle:– page quote news graphs company profile recommendations additional articles on the subject: as the most traded stock on Wall Street, when not long ago it became to the third largest company in the US by market value. The high marketability of the stock could be a disadvantage for investors if the company fails to meet the high expectations. The company’s reports tomorrow are expected to be one of the main events this week, with Wall Street predicting that anything less than amazing reports could cancel the The 47% rally made by the company’s stock so far.
An average of $30 billion worth of Nvidia shares changed hands daily during the last 30 trading days, surpassing Elon Musk’s electric car maker, which averaged $22 billion per day during the same period. Tesla has dominated daily trading in US stocks since 2020, with trading volumes reaching a record of over $35 billion several times in recent years.
The reports for the third quarter
Nvidia did beat expectations for profits and the forecast in the third quarter, but it was not enough for investors. The company’s share traded with lower prices due to concerns about China. While analysts praised the results and expressed optimism, investors were initially wary of entering Nvidia after the gains it enjoyed following the artificial intelligence hype and following concerns about restrictions on chip exports to China, one of Nvidia’s largest markets. As you remember, the US government is trying to prevent the arrival of advanced chips to China due to national security concerns, as China is expected to use this technology for military developments as well.
For the third quarter, the company recorded earnings per share of $4.02 on revenues of $18 billion. Analysts had expected earnings per share of $3.18 on revenue of $16.12 billion. The gross profit rate was 75%, while Wall Street expected 72.5%. Revenues from data centers were $14.51 billion, compared to expectations of $12.85 billion. In the gaming sector, revenues stood at 2.86 billion, compared to an expectation of 2.7 billion dollars. For the fourth quarter Nvidia expects revenues of 20 billion dollars with a deviation of 2% up or down. The expectation was for 17.9 billion dollars.
The chip giant also said it expects sales in China for the fourth quarter to drop significantly, but growth in other sectors is expected to minimize the impact. Nvidia trades according to a value of 1.69 trillion dollars, this after the company’s stock jumped by 219% in the last year and by 38% since the beginning of the year.
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