As we approach another eagerly anticipated earnings season in the tech sector, one name stands out prominently: Nvidia. The company has become a focal point for investors, primarily due to its leadership in the artificial intelligence (AI) realm. Recently, Nvidia’s stock price surged by over 16% in just a month, and it is now on track to potentially outperform Apple as the highest valued company globally.
This uptick in stock performance follows remarks from Nvidia’s CEO, Jensen Huang, who described the demand for the forthcoming Blackwell chip as “insane” during a recent CNBC interview. Following those comments, Nvidia shares jumped by approximately 18%, hitting a peak at $130. However, the momentum faced some hurdles when reports emerged regarding the Biden administration’s plans to cap the export of AI chips to select nations. This news momentarily stalled the stock’s impressive rally but it has since regained some stability.
Nvidia has showcased remarkable growth, with its recent fiscal report indicating a staggering 206% increase in overall revenue, reaching $18.1 billion, alongside a 279% surge in data center revenue to $14.5 billion. Despite this impressive trajectory, the upcoming earnings report poses a challenge: how to manage expectations after such a phenomenal last year. Concerns linger about a potential slowdown in growth, akin to the market reactions following Nvidia’s previous earnings announcement when, despite exceeding projections, the stock fell over 6%.
The quickening pace of AI investment has not evenly lifted all boats in the tech industry. For instance, while Broadcom has seen a 59% rise in its stock this year, bolstered by its role in AI infrastructure, Intel has faced significant challenges, with its shares plummeting by 55%. Qualcomm and AMD have posted more modest increases of 19% and 6%, respectively, with the latter positioned as a competitor to Nvidia in the AI chipset landscape.
The spotlight will not only be on Nvidia but also on its peers such as Microsoft, Google, and Amazon, whose spending on AI technologies will be key indicators of Nvidia’s performance. Given that these tech giants represent a significant share of the demand for Nvidia’s products, their upcoming financial results will offer insights into the overall trend of AI investment.
As we gear up for the upcoming weeks, investors are bracing themselves for a rollercoaster of data and predictions as Nvidia prepares to share its earnings report on May 22, 2024. With the tech landscape rapidly evolving, this earnings season promises to provide a clearer picture of the ongoing AI revolution and its implications for chip manufacturers. Stakeholders and tech enthusiasts alike are advised to remain vigilant as clouds of uncertainty and opportunity unfold in the world of technology and finance.