Nvidia is set to release its quarterly earnings report this Wednesday, with high expectations from the market. Revenue is projected to reach $24.6 billion, up from $22.1 billion in the previous quarter, and net income is expected to be $13.9 billion, compared to $12.8 billion last quarter. Despite Nvidia’s consistent strong performance, there are signs that the market may be growing weary of its dominance in the GPU market and mega earnings reports.
One indication of this possible shift in market sentiment is the decrease in options trading volume in Nvidia stock leading up to the last earnings release. The total options trading volume for Nvidia last week was 47% lower than the week before the previous earnings report in February. Additionally, the 30-day volatility for Nvidia has decreased, suggesting that future price movements may be less significant than in the past.
Analysts remain bullish on Nvidia ahead of the earnings report, with upgraded forecasts for revenue, earnings per share, net income, and EBITDA. However, there is a feeling that Nvidia may need to exceed already high expectations to sustain its share price rally. Some estimates suggest that Nvidia’s revenue will need to surpass expectations by $1 billion to satisfy the market.
Investors will also be closely monitoring Nvidia’s comments and future outlook during the earnings report. Any perceived weakness in their guidance could lead to disappointment in the market. While Nvidia is expected to perform well in this earnings report, there are concerns about potential future challenges, such as increased competition or lofty market expectations.
Despite Nvidia’s strong performance so far this year, the stock market rally has broadened, with other stocks outperforming Nvidia in the short term. Nvidia’s share price, although near an all-time high, has not been the best-performing stock in the S&P 500 this year. Expectations are high for Nvidia to potentially set new records following the earnings report, with increased options activity indicating bullish sentiment among some traders.
In conclusion, Nvidia’s earnings report will be closely watched for its impact on market sentiment in the near term. While Nvidia has been a standout performer in the past year, there are indications that interest in the stock may be waning due to high expectations, competition concerns, and an above-average P/E ratio. As the market looks for the next big opportunity, Nvidia’s continued success and dominance in the GPU market may face increased scrutiny in the coming weeks.
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https://www.fxstreet.com/news/nvidia-earnings-is-interest-starting-to-wane-202405211409
