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Nvidia Earnings: Traders Hope AI Chip Firm Can Soothe Tech Bubble Fears

Nvidia Earnings: Traders Hope AI Chip Firm Can Soothe Tech Bubble Fears

Bloomberg Television

14,690 views 1 month ago

Video Summary

This week's most closely watched stock, making up 3% of global market cap and 8% of the S&P 500, is under pressure due to concerns about the sustainability of the tech rally. Analysts are anticipating a significant revenue jump of 50% year-over-year, reaching $46 billion, with adjusted earnings per share just over $1.

Options traders are projecting considerable volatility, expecting swings of 6% or more post-earnings. A key focus for analysts will be NVIDIA's stance on China. Despite the US reversing its decision to halt sales of the H20 chip to China, the Chinese government is now reportedly advising domestic firms against purchasing this chip, which was specifically designed for the mainland market. This leaves NVIDIA in a quandary, especially as they've also reportedly halted production of this chip and maintain a reliance on the Chinese market.

Short Highlights

NVIDIA's Market Significance * Considered one of the most important stocks to follow this week. * Represents 3% of all global market cap. * Holds the heaviest weighting on the S&P 500 at approximately 8%.

Earnings Expectations and Market Sentiment * Tech stocks have been under pressure recently. * Concerns exist about the sustainability of the current tech rally. * Revenue is forecast to be $46 billion for the period. * This represents a 50% jump in revenue on the year. * Adjusted earnings per share are expected to be just over $1 US.

Options Market Activity * Options traders are anticipating significant price swings. * Expectations are for moves of around 6% plus or minus post-earnings.

The Critical China Situation * A major question for analysts is NVIDIA's commentary on China. * The US reversed its decision to halt sales of the H20 chip to China. * However, the Chinese government is now encouraging firms not to buy this chip. * The H20 chip was specifically designed for the mainland market. * NVIDIA has reportedly halted production of this chip. * The company continues to rely on the mainland market.

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