(Reuters) – Nvidia shares rose on Tuesday before the bell in a buildup in expectations over the quarterly results of the chip designer that has been the biggest beneficiary of a boom in artificial intelligence.
Rising hopes of Nvidia’s revenue target once again surpassing Wall Street estimates have fueled a 16.5% surge in shares over the past week.
They rose 8% to lift broader markets on Monday and closed just 2.1% short of their all-time high of $480.88 on July 14.
Wall Street expects Nvidia, which dominates the market for chips used to power generative AI like ChatGPT and many such services, to forecast 110% growth in third-quarter revenue to $12.50 billion when it reports results on Wednesday.
“It might be the most important report of this earnings season. We want to hear that they can build on the amazing quarter they had last quarter,” said Dennis Dick, market structure analyst at Triple D Trading.
The company had in May forecast second-quarter revenue that was more than 50% above expectations. That pushed its market capitalization above $1 trillion, making its stock the best performer on the S&P 500 index.
Nvidia’s blowout forecast last quarter had also sparked a rally in AI-stocks as well as Big Tech, making it one of the key drivers for the U.S. stocks rally this year.
“We continue to see strong demand that continues to outpace supply, especially with regard to AI GPU shipments,” said Frank Lee, analyst at HSBC Global Research.
At least 19 brokerages have this month raised their target price on Nvidia, pushing the median view to $500, which is a 6.5% increase to stock’s last closing price. Nvidia has more than tripled in value so far this year.
“Nvidia (and) AI story is what is driving the market right now. If Nvidia were to miss (expectations), this market would be in a world of pain,” Dick said.
(Reporting by Medha Singh in Bengaluru; additional reporting by Amruta Khandekar; Editing by Arun Koyyur)
Credit: The Star : Tech Feed
