Nvidia's Stock Hits Record Peak as Earnings Report Looms

Nvidia's stock reached a record high of $504.09 per share on Monday, as anticipation builds for the tech giant's upcoming third-quarter earnings release scheduled for Tuesday after the closing bell. The surge in stock price reflects investor confidence in Nvidia's role at the forefront of the 2023 artificial intelligence narrative. The company's performance is particularly in focus due to the recent upheaval surrounding Sam Altman's exit from ChatGPT-creator OpenAI and his subsequent joining of forces with Microsoft.

Analysts maintain high expectations for Nvidia's financial results. Bloomberg consensus estimates indicate that the company is projected to report $16.1 billion in revenue, a significant increase compared to $5.93 billion in the same quarter the previous year. Adjusted earnings per share (EPS) are anticipated to be $3.36, up from $0.58 in the third quarter last year. Revenue from the data center segment is expected at $12.82 billion, a substantial rise from $3.83 billion, while gaming revenue is forecasted at $2.7 billion, compared to $1.57 billion in the prior year's quarter.

Investors will also be keenly awaiting Nvidia's fourth-quarter revenue outlook, with prognostications suggesting a guidance of $17.8 billion. In August, Nvidia's stock climbed to an all-time high after second-quarter results surpassed analysts' predictions. However, the stock experienced turbulence in the following months as investors scrutinized the company's valuation and potential market impact from Chinese chip restrictions. Nvidia claimed no immediate effects from these restrictions in an SEC filing, a sentiment echoed by analysts expecting similar commentary in the upcoming report.

Nvidia continues to be a key growth propeller in AI, with demand expected to remain strong globally, except for China, and particularly from large cloud service providers in the US. This sentiment is reflected across other markets including Europe, Japan, and South Korea. Nvidia is considered a prime opportunity to leverage the expanding depths of artificial intelligence.

As part of the 'Magnificent 7' stocks—joining the ranks with Apple, Alphabet, Microsoft, Amazon, Meta, and Tesla—Nvidia has contributed to the momentum in the stock market this year. The collective group has seen an increase of over 70% in value through mid-November, vastly outstripping the 6% rise experienced by the other 493 companies in the S&P 500.

Following the sharp rise in Nvidia's valuation, investors are advised to prepare for potential 'post-Nvidia volatility' that could impact the market regardless of the earnings outcome.

Nvidia, earnings, stock