Key Points:
- Nvidia’s earnings report is expected to cause an 8.7% market move, potentially altering its market cap by $200 billion.
- Nvidia has gained 87% YTD, valuing it at $2.3 trillion, making it the third-largest company on Wall Street.
- Nvidia’s AI advancements drive growth across power, commodities, and utilities.
The market is buzzing with anticipation as Nvidia prepares to release its earnings report this Wednesday. Analysts forecast an expected move of 8.7%, translating to a staggering $200 billion swing in market capitalisation. Historically, the earnings have triggered significant market reactions, with the last earnings move reaching 16.4% and an average of 12% over the past eight quarters. This backdrop sets the stage for what could be another pivotal moment for the tech giant.
Nvidia’s 87% YTD Gain Propels Market Value to $2.3T
Nvidia’s performance year-to-date has been remarkable, boasting an 87% gain. This increase has propelled its market value to $2.3 trillion. Consequently, they now rank as the third-largest company on Wall Street, trailing only Microsoft and Apple. This impressive growth underscores the company’s critical role in the tech sector and the broader market. Investors and analysts closely monitor how these earnings will impact standing and trajectory for the rest of the year.
AI Expansion Drives Broad Market Influence
The AI revolution continues to be a major driver of Nvidia’s growth, with investor interest spilling over into other sectors like power, commodities, and utilities. Gonzalo Asis, a strategist at Bank of America, observed that AI benefits are broadening to power, commodities, and utilities. Furthermore, this diversification highlights the extensive reach of AI advancements, suggesting that Nvidia’s influence extends far beyond just the tech industry.
S&P 500 Growth Tied to 37% Earnings Contribution
Nvidia’s contributions to the S&P 500 have been substantial, with its earnings growth expected to boost the index’s growth by 9% over the next 12 months. Over the past year, Nvidia has contributed 37% to the S&P 500’s earnings, a testament to its significant impact. Moreover, for the upcoming earnings, analysts expect an EPS of $5.59 per share and quarterly revenue of $24.65 billion, a sharp increase from the previous quarter’s $7.19 billion.
Market Awaits Significant Price Movements in Nvidia Options
The options market reflects high expectations, with implied volatility for out-of-the-money calls nearly matching that of out-of-the-money puts. This balance indicates that traders prepare for significant price movements in either direction. Furthermore, the prevailing sentiment on Wall Street is optimistic, with many betting on a “blowout quarterly report from Nvidia.” This enthusiasm is palpable as the market eagerly awaits to see if Nvidia can deliver on these high expectations.
