Market is counting on Nvidia. The ‘whisper numbers’ it must deliver
Nvidia’s big earnings day is here, and the bar is high for the chipmaker’s stock to get a boost from its upcoming results. As of Tuesday afternoon, analysts polled by LSEG expected Nvidia to post third-quarter revenue of $54.92 billion. For the company’s fiscal fourth quarter, those covering the stock expect topline guidance of about $61.66 billion. Those revenue figures point to more than 56% year-over-year growth for both periods. But traders at JPMorgan think the so-called whisper numbers are even higher. “Survey says $56.32b & $63.02b” for fiscal third and fourth quarters, respectively. That would be a $1.4 billion beat for Q3 and fourth-quarter guidance exceeding the consensus by $1.36 billion. “If feels increasingly like the weight of the world is on NVDA,” said JPMorgan’s trading desk. “On the one hand, people seem to be positioned for a beat and raise … Yet the stock has substantially de-rated, and completely round-tripped the $500b slide from [GPU Technology Conference in Washington, D.C. in late October.] Folks worry that NVDA will become a share donor, and that outperformance becomes harder as the stock becomes larger.” The options market suggests Nvidia shares could move more than 6% in either direction after the release, according to Wolfe Research. Nvidia shares have struggled lately, losing more than 10% so far in November as concern over a possible artificial intelligence bubble pressured the chipmaker. The stock is also lagging fellow AI plays AMD and Broadcom this year. YTD performance: Nvidia : up 35.1% AMD : up 90.7% Broadcom : up 46.9% Citi also noted this week that Nvidia is no longer the most popular AI stock . That said, Wolfe Research and Goldman Sachs are bullish heading into the report, noting it could get the major averages out of their recent funk: Wolfe strategist Chris Senyek: “We continue to believe that concerns over an AI bubble bursting are overblown … at least for now. Should the broader U.S. economy hit a soft patch of economic data, we think Tech/Comm Services companies are well positioned to weather a temporary storm. As such, we remain buyers of AI related stocks on share price weakness.” Goldman trading desk: “My gut feeling … Consensus beat & raise… key focus will be commentary about pipeline beyond next quarter + any note of circularity and health of the cash flow. Am generally constructive into numbers, though expect a potentially muted reaction at first (we’ve seen more ‘normalized moves from NVDA lately), but then rally.”
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