Interim reports|Nvidia, which has become one of the world’s most valuable companies, has exceptionally high expectations for its results announcement. Even meeting expectations in the second quarter may not be enough for investors.
“Main publication of results for years.”
“The most important stock in the world.”
“The whole universe is waiting for ‘some’ chip company to release its results.”
It has been difficult to avoid exaggerations if you have followed the comments of stock market experts during Nvidia’s results announcement.
The US chip company will publish its second quarter results on Wednesday after the stock markets close in the US, i.e. a little after eleven o’clock in the evening Finnish time.
There is almost always a lot of interest in the earnings announcements of major companies, but the tensions around Nvidia’s results are the fiercest they’ve ever been.
On Wednesday evening, the stock market in the United States was in an expectant mood, but slightly down. Nvidia’s own share price was down by a couple of percent at seven in the evening Finnish time.
Nvidia has probably been the biggest beneficiary of the artificial intelligence boom that started in late 2022, and both its business and share price have improved at a furious pace in recent years.
With a market value of almost 3.1 trillion, or 3.1 trillion dollars, it is the second most valuable listed company in the world. Its weight in the world’s most followed stock index, the S&P 500, is no less than 6.7 percent, and in the technology-oriented Nasdaq 100 index, it is even greater.
In addition to stock indices, the company has found its way into the portfolios of many ordinary small investors. For example, among OP’s customers, Nvidia is currently the most owned foreign stock.
Big swings in Nvidia’s share price sensitively sway the broader market – or at least the key indices that follow the market.
And swinging really is to be expected.
The two of you since the announcement of the previous quarter’s results, Nvidia’s market value has increased by more than 200 billion dollars. News agency Bloomberg’s according to Nvidia’s stock has on average fluctuated around eight percent after the company’s earnings announcements.
Based on the options market, Nvidia’s share price is expected Bloomberg’s including fluctuating this time after the announcement of the results by almost 10 percent in one direction or the other. In Nvidia’s size category, it would mean a change of about 300 billion in the company’s market value.
“If there is a big good or a big bad in either direction, then I believe that ten percent will not be enough for anything,” says OP’s expert on stocks and ETFs Joona Heinola.
Heinola reminds us of the exceptional size range of course shops. If the predictions are correct, the change in Nvidia’s market value after the results announcement would be in the same order of magnitude as the market value of the entire Helsinki stock exchange.
Nvidia has become something of a talisman for the current state of the entire artificial intelligence boom, so its result may have wider implications for the stock market.
“In my opinion, the result can either ignite the artificial intelligence theme to an even stronger rise or start a wave of panic selling in the market. The effects are especially reflected in artificial intelligence themed companies and semiconductor producers. The direction is still open”, says Heinola.
Own in the chip giant’s results announcement is what success even means to it.
It is clear that Nvidia’s result will increase significantly from last year’s comparison period. The question is more about whether the rate of growth will meet the expectations set for it.
of The Wall Street Journal according to the analyst consensus, Nvidia’s revenue and earnings would have both more than doubled from last year’s comparison period.
Even that may not be enough. Recently, Nvidia has routinely clearly exceeded the profit expectations set for it, so even a moderate exceeding of expectations may be interpreted as a signal that the company’s upward trajectory is slowing down.
“[Odotusten ylityksestä] has become the standard, and after that nothing less is enough,” says Heinola.
Because expectations are set so high, investors follow everything that Nvidia communicates in connection with its results announcement like a hawk.
At least the eyes are fixed on the guidelines for the current and future quarters, the general market outlook and the company’s new chip models.
The company is expected to comment, among other things, on its next-generation Blackwell chip, which is in production and design according to reports had problems.
CEO of the investment service company Kurv Investment Management Howard Chan tells Bloomberg that mentions of the Blackwell chip will be vetted with the same precision as statements from the US Federal Reserve.
“Everybody is going to think about every single word,” says Chan.
OP’s Heinola states that in a growth story like Nvidia, one always looks for a weak spot that would give indications of a slowdown.
“Everyone probably knows that nothing lasts forever. The company is starting to get so big, even in terms of size, that it is not possible to continue such growth.”
“But as long as the music plays, the party goes on. Then when the volume goes down, it will certainly be reflected quite violently [Nvidian] to the course. That’s certainly what many here are excited about.”
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