Rising 229% in one year, Nvidia’s stock price hits record high one day before earnings release

Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please review our website policies before making a financial decision.

U.S. stocks were broadly higher, with Nvidia (NASDAQ: NVDA) shares rising 2.2% to $504.20 on Monday, setting a new record high for the chipmaker. That number surged to a new peak just one day before Nvidia releases its Q3 2024 report, which will provide a window into the latest AI demand trends.

Nvidia’s valuation reaches $1.25 trillion

Nvidia shares rose more than 2% on Monday, hitting a record high ahead of its quarterly earnings report. The company’s shares closed at $504.20, raising its valuation to $1.25 trillion.

The growth underscores the Santa Clara, Calif.-based chipmaker’s dramatic rebound in 2023, driven by continued demand for artificial intelligence services. Nvidia plays a crucial role in this technological revolution by producing the high-end chips that power generative AI solutions like ChatGPT.

As a result, its shares have more than tripled this year, making it the best-performing component of the S&P 500. Notably, much of the benchmark index’s impressive gains in 2023 have been driven by seven major companies, including Nvidia.

Wall Street’s expectations for Nvidia’s third-quarter report

Nvidia’s latest record-breaking stock market rally comes a day before the release of its third-quarter 2024 financial report.

Investors will be keeping a close eye on the results, which have recently been used as a gauge of demand for artificial intelligence. Nvidia’s guidance is particularly important as many try to analyze the impact on demand of recent U.S. restrictions on chip exports to China. Nvidia could be particularly damaging as a result of these restrictions, as it could be forced to cancel $5 billion worth of AI chip orders.

Analysts are generally optimistic about Nvidia’s actual expectations for third-quarter results.

Overall, Wall Street expects the company’s adjusted earnings to jump to $3.37 from $0.58 in the year-ago period. Revenue, meanwhile, is expected to rise 173% year over year to $16.2 billion.

Analysts believe the expected strong performance could push Nvidia shares higher. Susquehanna’s Christopher Rolland expects Nvidia’s quarterly results to be “double up,” citing supply chain improvements, an impressive order backlog and the chipmaker’s efforts to increase production capacity at existing suppliers. As a result, Rowland raised his price target on NVDA stock to $625 from $600, implying a potential upside of more than 23%.

Goldman Sachs analyst Toshiyari Hari also braced for strong third-quarter results and encouraging guidance from Nvidia, saying the risk-reward profile is attractive at current levels. The strategist maintains a “buy” rating on NVDA with a price target of $605.

Do you agree with analysts that Nvidia will post strong third-quarter results and see further gains in the stock market? Let us know in the comments below.

About the author

Tim Fries is the co-founder of The Tokenist. He holds a B.Sc. in Mechanical Engineering from the University of Michigan and an MBA from the University of Chicago Booth School of Business. Tim served as a senior associate on the investment team in RW Baird’s U.S. private equity division and was co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.

Information source: compiled from THETOKENIST by 0x Information.Copyright belongs to the author Tim Fries and may not be reproduced without permission.

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