Big Tech’s earnings season is closing with a bang, represented by Nvidia Corp., at the heart of the artificial intelligence mania, which will announce its financial results (today), which could set the tone for global stock markets for the rest of the year.
The chipmaker’s market capitalization has gained more than $370 billion since its last announcement (regarding its financial performance), and it’s the biggest contributor to the Nasdaq 100’s 36% rise this year. NVIDIA processors were major factors in the rush of shares of artificial intelligence companies that fueled the markets this year, making its (financial) report far more important than any traditional announcement.
Ben Ritz, an analyst at Melos Research, said that what Nvidia says about its forecast (indicative of its activity) for the remainder of fiscal year 2024 will guide sentiment around the entire AI thesis that drove the market rally.
Chip industry backers on Wall Street expect more good news. Analysts raised their targets for Nvidia’s share price ahead of its second-quarter financial report, which is expected to show revenue up 65% from the same period last year to about $11 billion, according to data compiled by Bloomberg. According to Citigroup, institutional investor expectations are even higher, at about $12 billion. Many analysts, such as HSBC’s Frank Lee, say the stock still has more room to run; Although it has more than tripled this year to trade at 44 times expected earnings (the share price-to-earnings multiple).
2023-08-23 12:10:17
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