On Wednesday, November 19, after the market closes, Nvidia will release the company's earnings report for the third quarter, attracting widespread attention from investors. Some traders believe this would be the most important event of the quarter. Given the company's dominance in AI and its role as a bellwether for the tech sector, the results could have a substantial impact on the entire market.
Analysts expect an increase in earnings per share to $1.25, with revenue projected to reach $54.6 billion, representing a 54% and 56% rise, respectively, compared to the figures from last year. Moreover, as Nvidia has already surpassed estimates in past quarters, this time the company is also expected to beat expectations, delivering even greater results. However, this will not necessarily result in an immediate rise in the Nvidia stock price. For long-term investors, the prudent approach is to focus on the data in the report rather than short-term market fluctuations that may surround its release.
An increase in figures is not the only aspect investors are looking for in the upcoming report. Taking into account the company’s leading position in the AI sector and its recent strategic partnerships and developments, the market is seeking confirmation of further accelerated growth driven by sustained demand. If the report meets expectations and demonstrates the company's commitment to expansion, it could trigger a rally and restore confidence in the tech sector following last week’s wobbling.
Recently, Nvidia has faced pressure due to the growing concerns about AI investment returns and fears of an AI bubble. Moreover, there have been some major sales of the company’s stocks. However, in some cases, the funds raised from sales were still allocated within the AI sector, as was the case with a Japanese company, SoftBank, when the company sold all its 32.1 million shares to make a major investment in OpenAI.
On Friday, November 14, the stock price increased slightly, closing at $190.17, representing an 8% decrease compared to the peak of October 29, when the company’s market cap briefly reached $5 trillion. After the report is released, the stock price is expected to experience greater activity, with some analysts believing it could skyrocket, as much of Nvidia’s potential is yet to be realized.
Amid this anticipation, the market is closely watching Nvidia’s upcoming earnings report, which could guide the company's performance in the coming year. The results could either fuel the AI rally or indicate that the sector is overheated.
This article was written in cooperation with TRADINGVIEW