Nvidia (NAS100:NVDA) releases its second-quarter earnings on Wednesday, near the all-time high for the stock.
NVDA – Daily Chart
The price of NVDA has found support from the recent dip at $171.00, and that is now the range for the upcoming earnings release.
Nvidia will be a big test for the market again as the stock makes up 8% of the entire S&P 500 market cap. Wall Street analysts are bullish on the latest earnings, but they are wary about chip demand and China ties.
The chipmaker releases its results after Wednesday’s market close, with trading in Nvidia options expecting a move of 6%, up or down, or up to a $260 billion change in Nvidia’s market cap.
Since NVDA released its last earnings, Nvidia’s stock has surged 35% over the last three months. However, the tension surrounding what is already the most closely watched earnings event of the season has added to some selling over the last week.
Wall Street analysts are expecting to see a Q2 revenue surge of 53% year-over-year to $46 billion. That would be at the higher end of management’s previous guidance, alongside earnings per share of $1.01.
Data centre sales have been the key driver of Nvidia’s business and are expected to come in at $40 billion. The risk is that the rise in the shares over the last three months would leave the company exposed to an earnings miss.
Investors will be closely watching the company’s China ties, as the country is a critical part of Nvidia’s profits. That could also leave Nvidia exposed to any further trade-related drama from Donald Trump.
CEO Jensen Huang also discussed the company winding down production of the H20 chip and working on a more powerful successor at the Taiwanese plants. That would need Trump’s permission to sell across the globe.
“It’s up to, of course, the United States government,” Huang said. “And we’re in dialogue with them, but it’s too soon to know”.
This will be a key week for the market and a big test for Nvidia’s demand trends.
