Nvidia’s second-quarter earnings are due to be reported next week, and everyone on the stock market seems to be paying attention to the chipmaker’s report—so much so that analysts have labeled the report as “the most important stock market event of the year.”
The semiconductor manufacturer has been repeatedly labeled as the “foundation of the AI revolution,” and, besides the Federal Reserve taking the spotlight over the last few weeks, Nvidia’s report will be defining.
One of the main researchers at Wedbush, Dan Ives, echoed this feeling saying, “We believe the most important week for the stock market this year and potentially in years for the Street will be next week as the Godfather of AI Jensen and Nvidia have earnings on deck.”
Analysts have brushed off recession worries
Since late July, investors have been concerned about the state of the market. The poorer than expected Job Reports of July sparked serious concerns of a looming recession.
However, recent events have shown it is more likely we are nearing a moment of great AI innovation very similar to the beginning of the internet era in 1996.
Expectations are mounting for Nvidia, as analysts project the company to report positive earnings for this quarter. The primary reason for this positive outlook is that Nvidia’s chips are utilized by every major tech company in the world.
In June, driven by the substantial AI demand worldwide, the company surpassed the $3 trillion market value, and while there are other trillion dollar companies, Nvidia is at the top.
As stocks rise, Nvidia’s Q2 projections are expected to surge to over $20 Billion
The US financial data and software company FactSet projects that, for Q2, Nvidia will bring in $28.72 billion in revenue. If projections are realized, the California-based chip manufacturer will have established yet another record.
Wall Street is also projecting Nvidia’s net income to be at $14.98 billion, with earnings per share of $0.65, leaving the company in excellent shape prior to the end of the fiscal year.
Nvidia is projected to increase its first-quarter numbers by a considerable margin. In Q1 2024, the chip manufacturer rebooted $26 billion in revenues. This was a 262 percent increase from 2023. However, projections released by FactSet estimate the company will increase revenues by $2 billion in 2024.
Analysts say we should also expect an increase in Nvidia’s stock price, given that, after the revenues reported in Q1 2024, the company’s stock price surpassed the $1,000 mark for the first time.
Nonetheless, not everything is ideal for Nvidia, and there are occasional complications. Despite the company’s great past quarter and the even better one projected for Q2, it was reported on Friday that Nvidia’s stock had fallen by 3.7 percent.
Analysts believe tech stocks will recover despite the drop, however. Industry analysts indicate that tech earnings have bolstered and marked the beginning of the fourth industrial revolution, which will be an AI-powered one.
This week, we will find out whether the optimism for the tech industry is valid or if there’s reason to be concerned about the state of the economy in the case that Nvidia does not deliver the expected performance.
