Another of the key market events arrives: Nvidia’s results. The publication of this company’s accounts has become one of the events highlighted each quarter, capable of altering the markets almost to the same level as the US elections themselves or the decisions of central banks. The company is not only looking at its current numbers, but also at its ability to take advantage of the future of artificial intelligence.
Why are Nvidia’s results important? The company currently weighs more than 7% and 9% of the S&P 500 and Nasdaq 100 respectively. The companies that have specifically driven the market the most in the last two years have been those related to chip or semiconductor manufacturers. In fact, the growth of all of them and specifically of Nvidia has been such that the company today exceeds 3.5 trillion dollars in capitalization, being the most valuable company in the world above Apple and Microsoft.
Nvidia, without a doubt, is the market’s standard-bearer and almost the best indicator for equities around the world. “In the short term, the latest results known in August led to drops in the price of its shares of 6%, but it has not been usual. In the last 13 results publications, the company has risen up to 7 times compared to 4 times of losses on the day after knowing the same. “2 of those 4 times occurred last year,” explains Juan José del Valle, analyst at Activotrade SV.
The figures expected by the market
The consensus expects Nvidia to present some net profits of 17,495 million dollars. If this figure is achieved, the semiconductor company would reap the highest profit figure in a quarter in its entire history and, in addition, It would mean improving the data for the same period of the previous year by up to 89%. (9,243 million dollars). In fact, since the last quarter of 2023 (when ChatGPT appeared and an AI fever broke out), Nvidia’s data has continued to exceed market estimates.
“We expect Nvidia to continue to perform well in all segments and for strong PC gaming demand to be a strong revenue driver for the company, offsetting OEMs, which are in secular decline. We expect the data center segment to grow strongly as hyperscale customers continue to adopt GPU-accelerated learning [unidades de procesamiento gráfico] to process large data sets. We are also encouraged by the strength of the automotive and business segments, although the strong adoption of autonomous driving in the market remains to be seen. We foresee a significant rise in stocks, which drives our overweight rating,” they argue from JP Morgan while waiting to know the official accounts.
For 2024 as a whole, they expect the net profit figure to rise to $68,616 million (144% more than the already historic figure for 2023). And, in just two exercises, Analysts project that the company will raise the profit figure above $100 billion.becoming one of the five companies in the world that would reap these benefits in 2026.
The fine print to drive action
It is almost a given that Nvidia’s numbers will be good, although the market is increasingly demanding of the company. Investors expect numbers and performance from its Blackwell superchip, which is set to dominate the future development of AI.
In the previous results, the company recognized some problems with the new model overheating. The Blackwell chip is Jensen Huang’s big bet and the mystery that he wants to clear up the markets. The only clue the CEO has offered is that it will record “several billion dollars of revenue.” Huang has noted that demand for the Blackwell chip has increased, noting that suppliers of this chip, whose physical production is outsourced, are meeting the pace established by the company.
Analysts at Morgan Stanley were optimistic about Blackwell’s potential impact on Nvidia’s revenue, saying it will be felt as early as 2025. The firm explains: “Based on our GPU testing supply chain checks, Blackwell chip production should be around 250,000-300,000 in the fourth quarter, which would be between $5 billion and $10 billion in income”.
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