The stock rises around 19% from a two-month low due to increasing confidence in the chip designer’s revenue surpassing Wall Street’s expectations
On Tuesday, Nvidia’s stocks reached an unprecedented peak, driven by mounting anticipation for the chip designer’s quarterly results. This company has notably profited from the surge in artificial intelligence. Growing confidence in Nvidia’s ability to exceed Wall Street revenue projections has led to a roughly 19% stock increase from last week’s two-month low.
The shares had risen by 0.4% to $471.55, reaching a new record of $481.87 shortly after the market opened. This surpasses its previous peak of $480.88 set on July 14th.
Anticipations from analysts are that Nvidia, a dominant force in the market for chips that fuel generative AI services like ChatGPT, is likely to predict a remarkable 110% growth in third-quarter revenue, amounting to $12.50 billion, as it releases its results on Wednesday.
This report could hold significant significance for this earnings season. “We’re eager to learn if they can continue the impressive momentum from the previous quarter,” commented Dennis Dick, a market structure analyst at Triple D Trading.
Back in May, the company projected second-quarter revenue that surpassed expectations by over 50%. This achievement propelled its market capitalization past the $1 trillion mark, positioning its stock as the leading performer on the S&P 500 index.
Moreover, Nvidia’s exceptional forecast in the previous quarter ignited a surge in AI-related stocks and significant tech companies, thus emerging as a crucial force driving the rally in US stocks throughout the year.
In order to maintain the current stock price, we’d hope for the profit margins to align with the rise in shares,” explained Brian Mulberry, a client portfolio manager at Zacks Investment Management, a holder of Nvidia shares.
During this month, no less than 19 brokerages have heightened their projected price for Nvidia, resulting in a median estimate of $500. This reflects a 6.5% uptick from the stock’s recent closing value. Remarkably, Nvidia shares have surged by over threefold in value within this year.
As indicated in a report from Goldman Sachs on Monday, Nvidia experienced the most substantial surge in favorability among hedge funds during the second quarter.
