Nvidia report looms as investors weigh AI bets after meteoric rise
nvidia prepares to release a quarterly report on Wednesday that could sway a jittery stock market after the chipmaker briefly became the most valuable company in the S&P 500 and is now said to be worth more than $3. 2 trillion.
Nvidia prepares to release results this week
Artificial intelligence chipmaker Nvidia will deliver a quarterly report on Wednesday covering the company’s fiscal quarter that ran from November through January, a period that analysts and investors say will test whether the hype around AI translates into sustained sales and profit gains.
Sky-high expectations for November–January quarter
Industry forecasts place revenue for the quarter at $66. 1 billion, a 68% increase from the prior year, while profit is projected to rise by more than 70%, per FactSet Research; those projections follow a stretch in which Nvidia has regularly cleared analysts’ bars over the past three years, often by a wide margin.
Even so, strong quarterly beats have not always calmed markets: after Nvidia exceeded forecasts in its last quarterly report, CEO Jensen Huang hailed "off the charts" demand for the company’s latest AI processors, but the stock still fell by 3% during the next day’s trading.
Big AI spending could mean more chip demand
The past month brought a fresh jolt of attention as four companies—Amazon, Microsoft, Google parent Alphabet and Facebook parent Meta Platforms—collectively committed about $650 billion this year to ramp up AI computing power, and a significant portion of that money is expected to be earmarked to buy more Nvidia chips.
That wave of corporate spending helped propel Nvidia’s annual revenue from $27 billion to more than $200 billion and transformed the company from an under-the-radar chipmaker valued at less than $400 billion at the end of 2022 into an AI bellwether now valued at nearly $4. 7 trillion.
A volatile ascent: market-value swings and investor skepticism
The run-up has also made Nvidia a market-moving force: its stock now accounts for roughly 7% of the S&P 500 and is a major factor in the Dow Jones Industrial Average and the Nasdaq composite. Last October, Nvidia briefly became the first company to surpass a $5 trillion market value before doubts about AI pulled its stock back from that peak, which it has not approached so far this year.
At the same time, investors have become increasingly skeptical about whether AI will live up to all the surrounding hyperbole, a dynamic that helps explain why stellar quarterly numbers have sometimes failed to boost the stock. Sentiments could shift quickly if Wednesday’s quarterly report provides evidence that the Santa Clara, California, company is building momentum that will enable it to increase annual sales by unclear in the provided context.
A sign in Santa Clara and what comes next
A sign to a Nvidia office building is shown in Santa Clara, Calif., Wednesday, May 31, 2023, an image that has circulated as the company’s prominence in AI has grown. The immediate next milestone is the company’s Wednesday quarterly report covering November through January; investors and analysts will be watching revenue, profit and any commentary on demand and customer spending plans.
