Buy Nvidia Before Or After Earnings? Actually, Both.

Tech stocks have come under pressure as investors adopt an increasingly asymmetric mindset — quick to punish shortfalls but slow to reward positive tidings. Lackluster reception for solid earnings from AMD and the sell-off in Palantir stock despite its strong execution – are recent examples that the market is increasing its scrutiny of AI stocks. Nvidia’s upcoming earnings and the market’s response will be a key litmus test for how investors truly perceive AI valuations right now.

Nvidia’s Earnings History and Post-Earnings Stock Behavior

Over the last eight quarters, Nvidia has consistently outperformed both revenue and earnings expectations. However, the stock’s post-earnings behavior has shifted meaningfully.

Earnings in a chronological order:

November 21, 2023 — Q3-FY2024

Earnings: Nvidia reported third-quarter revenues that tripled year-over-year. It surpassed topline and bottom line estimates, while delivering better-than-expected Q4 guidance.

Q4 guidance: ~$20 billion vs $18 billion estimated.

Stock Reaction: From its Nov 21, 2023 closing price of $49.91, the stock experienced fluctuations until Jan 8, 2024 ( likely because the company warned about U.S. export restrictions affecting its China…