Wall Street’s biggest AI darling is about to report earnings next week, and the results may show whether the mega-cap fueled market rally is justified as investors deliberate the path forward for interest rates. The minutes from the last Federal Reserve meeting in January are also on deck. Nvidia is set to post results next Wednesday, and expectations are high for the powerhouse stock that’s already up roughly 250% over the past 12 months. In its fourth quarter, Nvidia is projected to post annual growth of 118% to $59.04 billion in sales, driven by demand for its artificial intelligence server chips. The stakes are high for markets as well. Nvidia, which this week surpassed Alphabet in market capitalization , is now the third largest public company in the U.S., and a major contributor of gains in the S & P 500. The AI chipmaker has surged more than 40% this year, while the broader index is up about 5%. NVDA 1Y mountain Nvidia But a failure to beat expectations will likely dent Nvidia and the broader market. In November, the last time Nvidia posted quarterly results , the AI chipmaker fell 1% even after surpassing estimates on the top and bottom lines. “The bar is a little bit high at this point,” said Ayako Yoshioka, senior portfolio manager at Wealth Enhancement Group. “And, you know, the stock may just pull back a little bit even if they meet and or beat expectations. I think there might be some profit taking in the name in the short term.” In fact, as of Friday, the options implied move for Nvidia stands at about 10%, according to a CNBC analysis of data from FactSet. The options implied move refers to how much a stock’s price may change, up or down, following a major event such as an earnings announcement based on trading in the options market. “If we get a pullback of 11%, 15% on Nvidia, that could really impact, I think, overall markets,” Yoshioka said. “Just because you’re losing, you know, a good horse in the game.” Wall Street closed out a choppy week,…
2024-02-16 15:06:00
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