Street convinced Nvidia will rally on earnings. Retail investors skeptical
Retail enthusiasm around Nvidia has faded ahead of Wednesday’s big earnings report. Institutional investors remain bullish on Wall Street’s biggest artificial intelligence play, with more than 70% convinced the chipmaker will beat expectations when it reports earnings postmarket Wednesday for its fiscal quarter ended July, according to a note from the global investment research team at Goldman Sachs. But retail spending on Nvidia has fallen off a cliff in recent months, the bank found. Notional monthly flows into Jensen Huang’s company, which peaked at around $140 billion back in 2024 have since slumped to roughly $50 billion, Goldan said. Nvidia’s latest earnings could reveal whether the so-called “dumb money” can retain its edge. Turns out that retail investors — who returned to the market at the April lows even as institutional investors stayed on the sidelines — have made exceptional calls this year. NVDA 1D mountain Nvidia, one day The bar is certainly high for Nvidia. Growth has stalled dramatically , with revenue growth falling to 69% in the fiscal first quarter this year after five straight quarters of triple-digit expansion in 2023 and 2024. Nvidia revenue is expected to climb 53% year-over-year to $45.9 billion in its second quarter, according to LSEG. “If Nvidia beats and raises, revisions might restart, and high valuation could sustain,” the Goldman Sachs note said. “However, if the results are just in line or even lower, as what happened in the last two quarters, the market may assume margins have peaked, and the story will become less about hypergrowth and more about stabilization.” To be sure, any positive surprises from Nvidia could revive retail interest in a stock that by itself can decide the direction of the broad market. The maker of Graphics Processing Units accounts for roughly 8% of the S & P 500, the benchmark index’s largest company. Still, the reaction to Wednesday’s results could be tepid compared to the past. The global investment research team at Goldman Sachs, which reiterated a buy on Nvidia, said the one-day option implied move for Nvidia’s earnings is roughly 2%, below its two-year average realized move. — CNBC’s Kif Leswing contributed to this report.
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