Nvidia's Record High Stock Surge Amid Anticipated Earnings Report

Anticipation is high as Nvidia gears up to release its third quarter earnings later today, after the market close. The tech company's stock soared to new heights, closing at an all-time peak of $504.09 per share just the day before. This surge is buoyed by the buzz around artificial intelligence (AI) technologies, which have recently been thrown into the limelight due to OpenAI's developments and their co-founder Sam Altman's move to Microsoft.

The impending earnings report is drawing particular interest in light of Nvidia's central role in the 2023 AI narrative. Speculation is rife, with elevated expectations of the company's performance. Here's a comparison of what the Wall Street consensus, gathered by Bloomberg, is against Nvidia's results from the previous year's same quarter:

• Revenue: An impressive jump is anticipated, with $16.1 billion expected for this quarter compared to $5.93 billion from the third quarter last year.

• Adjusted EPS: Analysts project adjusted earnings per share (EPS) of $3.36, a steep climb from the $0.58 reported previously.

• Data center revenue: Data center revenue expectations stand at $12.82 billion versus the $3.83 billion recorded in the prior year.

• Gaming revenue: An expected boost to $2.7 billion in gaming revenue is noted, up from $1.57 billion.

Investor focus also rests on the company's revenue outlook for the next quarter, which Wall Street predicts to hit $17.8 billion. Historically, Nvidia has impressed with revenue guidance surpassing investor expectations in 2023.

In the face of buoyant previous results and a high forecast, Nvidia’s ride has not been without bumps. Following the highs earlier this year, the company grappled with valuation skepticism and news of chip restriction challenges in China. However, in a Securities and Exchange Commission (SEC) filing, Nvidia indicated that such restrictions shouldn't significantly impact them in the foreseeable future.

Beyond China, analysts see continued potential for Nvidia globally, particularly in the US where demand from large cloud service providers is strong. Europe, Japan, and South Korea are also on the radar as significant contributors to the company’s global AI-driven growth opportunities.

Nvidia is not just a standalone success but also contributes as part of the tech sector's 'Magnificent 7,' which includes other giants like Apple, Alphabet, Microsoft, Amazon, Meta, and Tesla. These companies have driven market momentum, collectively increasing more than 70% in value compared to a marginal 6% for the rest of the S&P 500 until mid-November.

With Nvidia's status as an influential player in the tech market, investors are advised to brace for 'post-Nvidia volatility,' implying possible market fluctuations post-earnings release, regardless of the actual outcomes.

Nvidia, Earnings, Stock