Nvidia aims to deliver "show stopper" earnings report
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Nvidia is barreling toward an earnings report Wednesday afternoon that will provide critical insight into the trajectory of the boom-or-bubble AI economy.
Why it matters: The chip giant's fate directly reflects how much other companies are investing in AI development, a subject that's been driving the stock market to new all-time highs.
What they're saying: It's one of the most important moments in years for Wall Street, Wedbush Securities analyst and tech bull Dan Ives writes in a research note, saying he expects a "show stopper performance."
- "It's hard to remember a time when there was so much anticipation regarding one company's earnings report," as Bespoke Investment Group puts it.
The big picture: Stocks have been driven to records this year on the back of Big Tech, who's momentum is being driven by AI. That puts Nvidia earnings under a huge microscope.
- The company's report Wednesday may actually impact the overall market more than Fed chair Jerome Powell's speech last week at Jackson Hole, Ameriprise Financial's Anthony Saglimbene told Bloomberg.
- The S&P 500 has gained 27% over the past 12 months. Nvidia, which weighs heavily on the index, is up 167% over the same period.
What we're watching: Investors will scrutinize every figure and every word of Nvidia's earnings report and conference call for clues on whether the company's key customers — basically all the tech giants — are dialing back AI investments after several straight quarters of massive spending hikes.
- "If they were to miss revenue or earnings, which we don't think is going to happen, or if guidance for next quarter isn't strong enough, we could see Nvidia and all of the AI stocks sell off," writes Dave Sekera, chief U.S. market strategist at Morningstar.
By the numbers: Analysts are expecting quarterly revenue of $28.73 billion and net income of $14.91 billion, according to S&P Capital IQ.
- That would represent a year-over-year revenue jump of 113% and a profit jump of 141%.
💭 Nathan's thought bubble: Nvidia's growth and profitability are breathtaking — so much so that it's natural to question whether it's sustainable.
