Nvidia: 5 things to watch
Nvidia shares have gained over 200% this year as AI fever runs hot
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The stakes are high for chipmaker Nvidia's quarterly results due after the bell Wednesday.
Along with the standard profit and sales goals, what the company says about its progress with artificial intelligence will likely set the tone for the entire industry.
With a market cap over $1 trillion and share price that has advanced over 200% this year, pressure is on CEO Jensen Huang to keep the momentum going.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| NVDA | NVIDIA CORP. | 141.95 | -4.72 | -3.22% |
WHAT IS ARTIFICIAL INTELLIGENCE (AI)?
FOX Business takes a look at what investors want to hear from the chip giant.
1. AI progress report
Considered the AI darling of Wall Street, Nvidia's update on demand will be key for not only the company but the industry.
"They are the toolmaker. Everyone is relying on them. They got the GPUs everyone wants. GPUs are the chips that allow for AI to actually happen. Everyone is trying to order them, and there is still a demand for them," Constellation Research founder R "Ray" Wang said during an interview with "Varney & Co." on FOX Business Network.
A Nvidia booth at 2023 Chinajoy Aug. 5, 2019, in Shanghai, China. (CFOTO/Future Publishing via Getty Images / Getty Images)
Wang noted the AI market will hit $2 trillion by 2030 with Nvidia leading the charge.
2. Arm IPO steps up competition
GLOBAL INVESTMENT IN AI COULD NEAR $200 BILLION BY 2025: GOLDMAN SACHS
Chipmaker Arm this week announced plans for an initial public offering.
"Nvidia is the clear leader in the broader chip space, but the battle for market share is likely to only get fiercer, particularly as Arm has noted in its IPO prospectus its plans to push further into the auto, AI and cloud computing spaces," Jason Mountford, trend analyst at Q.ai, told FOX Business.
Jensen Huang, CEO of Nvidia, speaks during a press conference at the Computex 2023 in Taipei May 30, 2023. (Sam Yeh/AFP via Getty Images / Getty Images)
Jensen may be asked about Arm's IPO plans and keeping rivals at bay.
A Nvidia Corp. Grace Hopper Superchip in the showroom of the company's offices in Taipei, Taiwan, June 2, 2023. (Getty Images / Getty Images)
3. High revenue expectations
Last quarter, Nvidia delivered a surprise revenue target increase, going to $11 billion from $7 billion, roughly a 65% jump from the same period a year ago. Some Wall Street analysts are predicting even better.
HSBC analyst Frank Lee lifted his price target on Nvidia to $780 from $600 ahead of earnings.
"We see Nvidia likely to beat its previous guidance as our fiscal year 2024 sales now up 9% ahead of consensus estimate and company guidance," Lee wrote.
HSBC also revised its earnings per share (EPS) estimates of 19% and 29%, which are now 21% and 23% above consensus estimates.
A Nvidia Corp. HGX H100 artificial intelligence supercomputing graphics processing unit at the showroom of the company's offices in Taipei, Taiwan, June 2, 2023. (Getty Images / Getty Images)
4. Nvidia's lofty stock price — AI fever
"Nvidia's stock price is up over 200% this year. Much of this has come off the back of the huge run of hype around AI after the launch of ChatGPT," Mountford said.
Nvidia
"Nvidia has ridden that wave to become one of the most valuable companies in the world," he added. "With such a rapid price rise, it's inevitable that we're going to see a correction at some point, though this shouldn't take away from the long-term viability of the industry."
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AAPL | APPLE INC. | 229.87 | +1.35 | +0.59% |
| AMZN | AMAZON.COM INC. | 197.12 | -1.26 | -0.64% |
| GOOGL | ALPHABET INC. | 164.76 | -2.87 | -1.71% |
Nvidia joined a handful of companies reaching a market value of over $1 trillion, including Apple, Amazon and Google parent Alphabet.
5. AI seeps into everyday life
AI technology is evolving and turning up in more industries in user-friendly ways.
"As competition and investment continues, we'll see broader applications for microchips than even today," Mountford said.
Nvidia remains the big winner in AI wars: R 'Ray' Wang
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"Not long ago, microchips were found only in desktop computers, and now we find them everywhere from our phones to our cars to our refrigerators and vacuum cleaners," he said. "This trend will continue, opening up additional scope for features and technology in our everyday items, driving value for companies in almost every sector of the market."
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| ADI | ANALOG DEVICES INC. | 214.59 | +0.63 | +0.29% |
| INTC | INTEL CORP. | 24.50 | +0.06 | +0.25% |
| AMD | ADVANCED MICRO DEVICES INC. | 138.35 | +0.86 | +0.63% |
Nvidia's results and commentary could also impact a host of other AI-related names, including Analog Devices, Intel and AMD.