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Investor expectations for Nvidia’s upcoming earnings report are sky-high.
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JPMorgan mentioned Nvidia’s inventory value might negatively react to a blowout earnings report.
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“The larger the beat,” the extra the market will “assume that offer is getting higher,” JPMorgan mentioned.
All eyes will probably be on Nvidia after the market shut immediately as the corporate releases its fourth-quarter earnings report, and investor expectations are sky-high.
And even when Nvidia exceeds investor expectations when it stories outcomes and steering, the inventory might see a damaging response, a Wednesday word from JPMorgan’s buying and selling desk mentioned.
“If Jensen’s GPU behemoth is ready to report nice numbers, and by ‘nice’ I imply 4Q DC revs north of $20 billion with implied acceleration for Q1 DC,” JPMorgan mentioned, referring to data-center revenues, “inventory is perhaps wonderful however it is going to additionally beg the query as as to if or not provide is getting higher.”
Nvidia has been supply-constrained for its H100 GPU chips for months as demand has soared. The provision-demand mismatch was so unhealthy over the summer season that Elon Musk mentioned Tesla could not purchase them quick sufficient.
“We’re utilizing quite a lot of Nvidia {hardware},” Musk mentioned on Tesla’s second-quarter earnings name. “We’ll really take it as quick as they will ship it to us. Frankly, if they may ship us sufficient GPUs, we’d not want Dojo. However they can not. They have so many shoppers.”
But when provide constraints are beginning to ease, it may very well be a nasty signal for Nvidia, as that might result in a provide glut, which isn’t unusual for the semiconductor business.
“The larger the beat on steering, the extra the market goes to assume that offer is getting higher, and that there may very well be a listing correction in 2H24,” JPMorgan mentioned.
With dangers skewed to the draw back for Nvidia’s inventory following its large surge over the previous yr, it seems to be a lose-lose state of affairs for the inventory within the quick time period, with the financial institution saying that Nvidia’s implied transfer of 11% is “undoubtedly greater than scary” if it misses analyst expectations.
“Soooo, unhealthy is unhealthy, good is okay/unhealthy, however too good is perhaps not good,” JPMorgan mentioned.
Here is what different Wall Avenue analysts predict from Nvidia’s upcoming earnings report.
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