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NVDA, Nasdaq 100 key points
- NVDA has “beat” analyst estimates in seven of the last eight earnings reports, with shares rising an average of more than 7%.
- Options traders are expecting a +/- 11% move in response to Nvidia’s earnings report, a truly astonishing move in a $1.8 trillion stock.
- NVDA is experiencing its biggest drop of the year so far to trade below its near-term 8-day EMA for the first time in seven weeks.
When are Nvidia earnings?
Nvidia reports its fourth quarter earnings on Wednesday February 21street after market close.
What are Nvidia’s earnings expectations?
Analysts expect Nvidia to report $4.58 in EPS on $20.6 billion in revenue.
Nvidia earnings preview
One definition of a market favorite stock is “a stock that is often discussed at dinner parties and rarely questioned as a good investment.” By that definition, Nvidia (NVDA) is the ultimate market favorite in the current environment.
Located at the epicenter of the AI revolution, Nvidia shares have quintupled since the beginning of 2023 as demand for its semiconductors has gone parabolic. Just last week, the company saw its market capitalization rise to $1.8 trillion, eclipsing Amazon and Alphabet/Google to become the third most valuable stock in the United States. Now that the rest of the “Magnificent Seven” stocks have reported mostly solid earnings, the big question on traders’ minds is whether Nvidia can continue to deliver exceptional results.
As the chart below shows, NVDA has “beat” analyst estimates on both earnings (by an average of 14%) and revenue (by an average of 7%) in seven of the last eight earnings reports, and the stock rose an average of more than 7% in response to those results:
Source: Bloomberg
Heading into this week’s release, traders are expecting an even bigger than average move, and options implied volatility suggests that We could see a +/- 11% move in response to Nvidia’s earnings report, a truly astonishing move in a $1.8 trillion stock.
Beyond the company’s top-line results, investors will be particularly interested to see how Nvidia CEO Jensen Huang sees demand evolving over the rest of the year. Any sign that the AI boom may be slowing could trigger a major bearish reversal in the stock, so traders are justifiably on tenterhooks ahead of the release.
Nvidia Technical Analysis – NVDA Daily Chart
Fountain: TradingViewStoneX
Technically speaking, NVDA has had a crazy start to the year, going from under $500 on New Year’s Day to an intraday high near $750 last week. At the time of writing this Wednesday morning, NVDA is experiencing its biggest drop of the year so far to trade below its short-term 8-day EMA for the first time in seven weeks.
It’s not surprising that some traders want to take profits ahead of the big earnings report, but current sales could also be an ominous sign if results don’t meet the high hurdle traders expect… or if earnings and revenue are technically ” slightly exceeded expectations, but the stock fails to see a significant rebound. After such an impressive rally, even a shallow 38.2% or 50% Fibonacci retracement could see the stock reach back to 640 or 610 Dollars.
Nasdaq 100 Technical Analysis – NDX Daily Chart
Fountain: TradingViewStoneX
With a lofty allocation of over 5% to NVDA (not to mention the downstream effects of NVDA’s earnings on other semiconductor and AI-focused names), the Nasdaq 100 may also see a dramatic move in response to this week’s earnings. .
Looking at the chart, the Nasdaq 100 is on track to break the uptrend line from its late October lows in early trading today, potentially opening the door for a deeper pullback towards the 50-day EMA in the area. of 17,000 dollars. At this point, a spectacular earnings number from Nvidia may be necessary to revitalize the Nasdaq 100’s weakening bullish momentum.
— Written by Matt Weller, Global Head of Research
Follow Matt on Twitter: @MWellerFX
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