Nvidia Corp., a leading chip giant, is set to report its latest financial results, but investors are wary as the stock price continues to slide. The stock was down 6.2% on Tuesday, heading towards its worst day in over a year. This decline could potentially lead to Nvidia experiencing its largest single-day drop in market capitalization in history, amounting to a loss of $112 billion. This is double the decline seen on May 31, 2023, which stood at $56 billion.
The high expectations surrounding Nvidia’s earnings have contributed to the stock’s decline. The company’s shares have surged more than 35% this year, leading to raised market expectations. Analysts anticipate adjusted earnings per share of $4.59 on $20.4 billion in revenue for the fiscal fourth quarter ending in January. These figures represent impressive growth, with adjusted earnings per share expected to increase by over 400% and revenue potentially more than tripling.
However, with the bar set so high, analysts are concerned about the potential downside for Nvidia. Mizuho analyst Jordan Klein suggests that a potential stock move to the downside could be more substantial than any upside potential. Piper Sandler analyst Harsh Kumar believes that even if Nvidia forecasts data-center revenue above the consensus view, the stock is likely to remain relatively flat due to high market expectations.
Of particular interest will be Nvidia’s view on the China market, considering the Commerce Department’s restrictions on sales into the country. The company has been working on modifying its products to ensure compliance and continued sales in China. Analysts expect Nvidia’s guidance to exclude revenues from newly developed chips for China in the near term, with potential for a revenue stream to resume in the future.
Despite near-term uncertainties, analysts remain generally constructive on Nvidia’s long-term prospects. The company’s innovations in AI technology and its forthcoming B100 product are seen as key drivers. Moreover, the increasing demand for processing power in AI applications, coupled with major customers like Amazon, Meta Platforms, and Microsoft, provide reasons for optimism.
While Nvidia’s stock may face short-term challenges due to high expectations, analysts believe any pullback is likely to be temporary. The company’s strong positioning in the market and its focus on cutting-edge technology continue to generate confidence among investors.
Nvidia’s Financial Results: FAQ Section
1. What is the current situation with Nvidia’s stock price?
The stock price of Nvidia Corp. has been sliding, with a decline of 6.2% on Tuesday, heading towards its worst day in over a year. This could potentially lead to Nvidia experiencing its largest single-day drop in market capitalization, amounting to a loss of $112 billion.
2. Why is the stock price declining?
The high expectations surrounding Nvidia’s earnings have contributed to the decline in stock price. The company’s shares have surged more than 35% this year, leading to raised market expectations.
3. What are the anticipated financial figures for Nvidia’s fiscal fourth quarter?
Analysts anticipate adjusted earnings per share of $4.59 on $20.4 billion in revenue for Nvidia’s fiscal fourth quarter ending in January. These figures represent impressive growth, with adjusted earnings per share expected to increase by over 400% and revenue potentially more than tripling.
4. What are analysts’ concerns about Nvidia’s performance?
Analysts are concerned about the potential downside for Nvidia due to the high market expectations. They suggest that the stock may experience a more substantial decline rather than significant upside potential. Even if Nvidia forecasts data-center revenue above the consensus view, it is likely that the stock will remain relatively flat.
5. What is the impact of the Commerce Department’s restrictions on Nvidia?
Of particular interest will be Nvidia’s view on the China market, considering the Commerce Department’s restrictions on sales into the country. Analysts expect Nvidia’s guidance to exclude revenues from newly developed chips for China in the near term, with potential for a revenue stream to resume in the future.
6. What are the long-term prospects for Nvidia?
Analysts remain generally constructive on Nvidia’s long-term prospects due to the company’s innovations in AI technology and its forthcoming B100 product. The increasing demand for processing power in AI applications, along with major customers like Amazon, Meta Platforms, and Microsoft, provide reasons for optimism.
7. Will the stock price decline be temporary?
While Nvidia’s stock may face short-term challenges due to high expectations, analysts believe that any pullback is likely to be temporary. They highlight Nvidia’s strong positioning in the market and its focus on cutting-edge technology as factors that continue to generate confidence among investors.
The source of the article is from the blog tvbzorg.com