Nvidia Corporation is poised to reveal another impressive set of financial results this Wednesday, with mounting anticipation on Wall Street. The escalating expectations surrounding this tech giant may elucidate the recent downturn in Nvidia’s stock (NVDA, -4.85%), which was on track for its most substantial decline in over a year just before the earnings announcement. By Tuesday afternoon, the shares had plummeted by 6.2%, positioning themselves for their most significant single-day percentage drop since December 27, 2022, when they experienced a 7.1% decrease.
The market capitalization of Nvidia was projected to shrink by \(112 billion, marking the most substantial daily loss in the company’s history. This decline surpassed the \)56 billion dip observed on May 31, 2023, exceeding the entire market capitalization of other major chip companies like Micron Technology Inc. (MU, +1.37%) at \(88 billion and Analog Devices Inc. (ADI, +0.42%) at \)93 billion.
HSBC analyst Frank Lee emphasized, “Given Nvidia’s stock price surge year-to-date, we believe overall market expectations have risen significantly.” The stock has surged by over 35% this year, leading to heightened consensus earnings close to their forecasts. However, Lee and his team indicated limited potential for further earnings growth in 2024 compared to the surprises witnessed in 2023.
As per analysts surveyed by FactSet, Nvidia is anticipated to announce adjusted earnings of \(4.59 per share on \)20.4 billion in revenue for the fiscal fourth quarter ending in January, with adjusted EPS likely to surge by over 400% and revenue potentially tripling.
Looking forward, analysts predict that Nvidia will sustain this positive trajectory in the current quarter, with projected adjusted EPS of \(5.02 (up over 350%) and revenue of \)22.2 billion (approximately triple the previous year’s figures).
The outlook for Nvidia appears challenging with exceedingly high expectations, as highlighted by Mizuho desk-based analyst Jordan Klein. Piper Sandler analyst Harsh Kumar anticipates Nvidia to forecast data-center revenue significantly above the consensus view, potentially indicating a 10% sequential growth.
The company’s approach to the Chinese market will be under scrutiny, particularly in light of Commerce Department restrictions. Analysts are eager to glean insights into Nvidia’s strategy amidst these challenges.
In summary, while optimism surrounds Nvidia’s performance, analysts exercise caution regarding the stock’s post-earnings response. The market eagerly anticipates Nvidia’s guidance and strategic maneuvers in navigating the evolving landscape, especially in critical domains like AI and market expansion.
