Nvidia’s highly anticipated fourth-quarter earnings later Wednesday could be the catalyst that snaps the S&P 500’s four-day losing streak and reignites investor enthusiasm for AI and tech stocks, predicts the CEO of financial advisory giant deVere Group.
Nigel Green expects Nvidia to beat analyst forecasts – but the real question is whether that will be enough to satisfy the market’s soaring expectations.
Analysts expect revenue of $38.1 bln, a 72% year-over-year increase, with adjusted earnings per share of 84-85c, up 64% from last year.
“Wall Street already anticipates stellar results, but investors appear to be pricing in something even bigger – possibly beyond what analysts have factored in,” said Green.
“This sets up a scenario where Nvidia delivers strong numbers but still faces near-term stock volatility as traders digest the results.”
Nvidia has cemented itself as the dominant force in artificial intelligence. Its high-performance GPUs remain the backbone of AI computing, with skyrocketing demand from major tech firms, cloud providers, and enterprises.
Its previous earnings report in November stunned Wall Street with a y-o-y revenue surge of 206%, triggering another leg higher in the stock price. The AI boom has powered Nvidia into a league of its own, with demand vastly outstripping supply.
Data centre boom
This quarter, analysts expect another massive 82% jump in revenue to $34.06 bln, primarily fueled by the data centre business – the most critical segment, where Nvidia’s chips power AI models at tech giants like Microsoft, Google and Amazon.
However, it’s not just past performance that matters. Investors want guidance, said Green.
Will Nvidia’s growth sustain at this breakneck pace? Can supply keep up with demand? And will CEO Jensen Huang signal even bigger AI ambitions?
“While we are bullish on Nvidia’s long-term potential, expectations for this earnings release might be overheated.
“Analysts already forecast record-breaking numbers, but the market appears to have set an even higher bar – one that Nvidia might struggle to clear.
“If the company delivers another impressive earnings beat, we could still see some knee-jerk selling as traders lock in profits.”
This is a classic “buy the rumour, sell the news” scenario.
The deVere CEO explained that investors have bid Nvidia’s stock to near-record highs in anticipation of a blowout report. If the actual numbers, while impressive, don’t significantly exceed the already-lofty expectations, a temporary pullback could follow.
Should Nvidia’s stock dip post-earnings, deVere Group sees it as a prime buying opportunity.
“The AI-driven future is still in its early stages,” Green added. “Any post-earnings ‘weakness’ in Nvidia should be seen as an opportunity, not a warning sign. The company’s long-term trajectory remains exceptionally strong.”
Despite potential short-term volatility, Nvidia’s dominance in AI computing is unchallenged. Its chips are the foundation of everything from AI model training to cloud computing and autonomous systems. Demand for its products isn’t cyclical – it’s exponential.
“With the S&P 500 under pressure after four straight days of losses, Nvidia’s earnings could be the event that turns sentiment around,” suggested the deVere CEO.
“A strong report could inject fresh confidence into the AI sector, lifting tech stocks and providing momentum for the broader market.
“On the other hand, if investors react negatively due to expectations being too high, it could signal short-term turbulence but not a fundamental issue with Nvidia’s business.”
The deVere Group remains bullish on Nvidia’s long-term prospects. The AI boom is still in its early innings, and Nvidia remains the central player in this multi-trillion-dollar revolution.
“However, it’s also critical to look beyond the AI giants and at the wider ecosystem too.”
Green concluded that, “Nvidia’s earnings could be the spark that reignites the market, but with expectations running sky-high, investors may still want more.
“Regardless of any short-term reaction, the AI-driven future remains unstoppable — and Nvidia is still leading the charge.”
