This week, the spotlight is on Nvidia as the semiconductor giant unveils its quarterly earnings, a report that could significantly influence market sentiment as the year approaches its close. Nvidia is expected to report adjusted earnings of $0.71 per share on revenue of $33.09 billion, reflecting a 10% increase from the previous quarter and an impressive 90% year-over-year growth. Despite its meteoric rise—up nearly 200% year-to-date—this earnings release will test whether Nvidia’s $3.4 trillion valuation is still justified.
While Nvidia is widely expected to surpass its forecasts, the forward-looking guidance will likely have the greatest impact. The company’s year-over-year growth has been nothing short of extraordinary, and its market dominance is unquestionable. However, quarter-over-quarter growth has shown signs of slowing, raising concerns about a potential cooldown in the AI-driven rally. Investors will scrutinize this number closely, looking for any further signs of weakness in future projections, which could provide insights into the broader semiconductor sector.
Recent developments underscore the stakes. Last week, Applied Materials, a key supplier to the semiconductor industry, delivered mixed earnings and offered disappointing guidance, sending its stock down 9% and rippling through the industry. This highlights how Nvidia’s report could similarly sway markets in either direction.
As of now, the options market is pricing in a potential (+/-) $23 move in Nvidia’s stock post-earnings, with implications extending through December 20th. A strong report could propel Nvidia back above $150.00 and to new all-time highs. Conversely, any disappointment or lackluster guidance could spark a sharp sell-off.
This week’s results will not only test Nvidia’s resilience but could also set the tone for the semiconductor industry and the broader markets heading into 2024.