On Wednesday, August 23, 2023, Nvidia shares increased 0.5%. Investors grew more confident that the chip designer would provide another positive outlook and support markets as it benefited from early investments in artificial intelligence.
The most valuable semiconductor company’s stock temporarily reached a new high in the previous session, but it ultimately closed 2.8% lower as the market.
Nvidia’s Earnings and the Race for Innovation
The company’s stock has increased 14% in the last week and tripled in value so far this year as investors increase their stakes in the business, which basically manufactures all chips used in generative AI systems like ChatGPT.
AJ Bell investment director Russ Mould said:
“A lot is riding on these numbers, with the shares surging to fresh record highs ahead of their release. Given much of the gains made by equities in 2023 have been centered on Nvidia and the whole AI story, they are likely to have a significant impact on the wider market too.”
Look at the below post which shows the shares and other details of Nvidia:
Nvidia in 2023:
• Shares +226.79% YTD
• Leads Nasdaq 100 gains
• Market value up $825.8 billion
• 5th biggest weight on S&P and Nasdaq
• 8th company ever to hit $1 trillion valuation
The world’s newest juggernaut. pic.twitter.com/dKrKONFNh9
— Morning Brew ☕️ (@MorningBrew) August 23, 2023
Holger Zschaepitz shared a chart which showed how high the expectations are for Nvidia’s figures:
This chart shows how high the expectations are for #Nvidia‘s figures. The share is trading at 44 times sales. It would not be the first time that the share crashes again. But maybe it will pull off the big miracle for the 2nd quarter in a row. pic.twitter.com/FSMvwNvYeA
— Holger Zschaepitz (@Schuldensuehner) August 23, 2023
In May, 2023 Nvidia’s outstanding prognosis for the prior quarter propelled the chip company to a market value of $1 trillion and ignited a rally in the S&P 500 technology sector, which increased 8% in the five sessions following its results.
Nvidia is a member of the so-called Magnificent Seven group of mega-cap firms, including Apple and Tesla and has been responsible for the 14.3% increase in the S&P 500 this year. Positive earnings from Nvidia, whose shares are leading the S&P 500 this year are anticipated by investors to rekindle the stock market rise that has been stumbling in recent weeks.
The stock’s rise has increased its valuation multiple to about 43 times the consensus earnings for the upcoming 12 months slightly under its three-year average of 45.
Wall Street anticipates the chip designer to announce a third-quarter sales increase of 112.6 per cent or $12.61 billion. Investors will be monitoring the data center sales at Nvidia which houses the highly sought-after H100 processor used in AI.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank said:
“Anything less than absolutely fantastic could trigger a sharp downside correction in Nvidia’s stock price.”
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