We recommend that you take time off from work on February 21, 2024.
why?
Nvidia (NVDA), the most important company to humanity, will report its earnings after the close. A word from King of Chips leader Jensen Huang could sway the entire market for weeks.
I know this sounds completely ridiculous, but it highlights just how insane it is to study and report on this major AI effort. The companies listed here are very likely to have triple-digit earnings growth in their most recent quarters, and may be considered disappointing.
In fact, NVIDIA may report triple-digit earnings growth and outline its remaining two quarters, but that may still not be enough for investors who have seen the stock rise 55% since the beginning of 2024. I don't know.
And I think this concern is nicely highlighted in a new Bank of America memo by veteran chip analyst Vivek Arya that I stumbled upon in my FriYay inbox.
Here's what caught my attention from Aria:
“[We] I wouldn't be surprised if there was a notable but short-lived pullback after the recent parabolic rise in stock prices. Bloomberg options show an implied post-earnings change of ~11%. Expectations have been steadily rising, with NVIDIA F4Q/1Q Report/Induced Sales expected to exceed expectations with bullish buy-side estimates of $21.7B/$23B, 9%/7% above consensus. There is less room for wiggle. ”
That said, Arya has a buy rating on Nvidia and a $800 price target, looking for earnings.
he added:
“However, in our view, any potential discrepancies with bullish expectations are more likely to be in supply (memory, packaging) rather than demand or competition related. , stock price volatility is likely short-lived as investors focus on Nvidia's flagship GPU Tech Conference (GTC), scheduled for March 18-21, featuring key pipeline, partners, and AI TAMs. That's what we expect to stay in between. [total addressable market] update information. For reference, in his T+1 days after the past six annual GTC events, Nvidia stock has risen an average of 6% (SPX has risen 1%). ”
I guess it's just another day in the world of Nvidia hype.
