Nvidia accounts for nearly 3.2 per cent of the S&P 500 - a record-high weight for the company - and its earnings report is the most keenly awaited of the season.
Shares climbed as much as 2.6 per cent to hit an all-time intraday high of $481.87, before falling as much as 3 per cent. The stock is up more than 14 per cent off a low hit earlier this month, and has surged 220 per cent this year, making it by far the biggest gainer among constituents of the SIn a sign of how significant Wednesday’s report will be, the options market is bracing for a move of 9.8 per cent following the results.
“It tells me that people are still scrambling to buy calls in Nvidia,” said Scott Nations, president of Nations Indexes. “They still want upside much more than they’re worried about downside protection.
Last quarter, Nvidia gave a forecast that was far stronger than expected, cementing its status as a primary beneficiary of AI spending. The upcoming report will provide new details on whether demand is holding up enough to justify the stock’s surge. Revenue is seen rising 65 per cent from the year-ago period, according to data compiled by Bloomberg.
Investors are “looking for continued outsized growth despite supply constraints” for graphics processing units and will want to see “a timeline for supply-demand balance regarding GPUs and AI demand,” according to WestPark Capital. Nvidia’s year-to-date rally has resulted in a lofty valuation. The stock trades at roughly 45 times estimated earnings, above its 10-year average of 32, as well as at 21.4 times estimated sales. The Nasdaq 100 Index trades under four times estimated sales.
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