Nvidia Earnings Preview: Will AI Hyperscalers Keep Nvidia's Outlook Alive?
Nvidia Earnings Preview: Will AI Hyperscalers Keep Nvidia's Outlook Alive?
- Nvidia to report earnings on Wednesday, November 19, after the market close.
- Traders expect Nvidia to post EPS of $1.25 on $54.74 billion in revenue.
- Hyperscaler demand remains critical for the stock price as AI spending remains in focus.
Nvidia earnings slated for November 19 as market braces for numbers to assess the AI trade
Earnings from reigning leader in artificial intelligence mark a bellwether event for the stock market, given the focus and confidence investors are banking on to continue driving the market higher. A positive report could help breathe a fresh breath of confidence into the broader market, especially semiconductor stocks that have done much of the heavy lifting this year.
Nvidia rallied 140% since the market sold off in April following President Trump’s tariff announcements. Prices are down about 5% since the start of the month as we approach the earnings report. This could be seen as a buying opportunity for investors who are banking on a bullish report.
Alternatively, the broader market via the S&P 500 is up about 40%, a notable accomplishment. However, Nvidia’s performance shows it remains a market darling, and the recent pullback is hardly enough of a reason to call it quits.
In fact, analysts are growing more optimistic on the stock. Earlier this week, Citi Research increased its price target on Nvidia, raising it to $720 per share, up from $650 per share. SoftBank, however, unloaded its stake in Nvidia back in October, according to its earnings report. That announcement pressured Nvidia lower, but SoftBank’s unloading was more of a strategic shift to focus investments elsewhere, primarily in OpenAI.
One of the big points for Nvidia will be its data center revenue growth, which came in at +55% year-over-year in the last quarter. That growth came despite some headwinds overseas, particularly from the H20 sales ban to China affecting the segment. A positive note on demand from AI hyperscalers, that is large cloud providers like Amazon (AMZN), will be key to a positive stock reaction on earnings.
What do investors expect?
According to TradingView, investors expect Nvidia to post earnings per share (EPS) of $1.25 on $54.74 billion in revenue. That would compare to last year when Nvidia saw EPS at $0.81 on $35.08 billion in revenue. Last quarter, Nvidia’s EPS and revenue came in at $1.05 and $46.74 billion, respectively.
Nvidia has beaten EPS and revenue estimates in every quarter over the preceding year, highlighting its ability to overperform against expectations. A miss on either metric would of course be less than ideal for the share price reaction, but the guidance from leadership will remain the vital component for investors.
Trading Nvidia earnings
Nvidia options show an expected move of +/- 14.79 points, or about 7.7% of Wednesday’s 192.22 stock price. That move would take us just below the November swing low of 178.91 and put the October swing low of 176.76 in focus. Alternatively, the topside of that range would bring prices near October’s all-time high of 212.19.
The implied volatility rank (IVR) sits at 29.1, meaning that volatility is slightly reduced compared to the past twelve months of trading.
Technically, Nvidia is trading right at its 21-day exponential moving average (EMA) after dropping below the shorter-term 9-day EMA. The 50-day simple moving average (SMA) at 184.81 has provided support on downswings going back to September. If prices drop after earnings, that SMA could prove to be a vital level of support.
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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