This is the conclusion of today’s Morning Brief, which you Sign up to receive it in your inbox every morning, along with:
Are you ready for the most important earnings report of 2024?
Interestingly, this company won the award for the most important earnings report of 2024 (and every quarter of 2023) when it reported three months ago!
I’m talking about Nvidia (NVDA). Earnings will be released on August 28th after the market closes.
Every day, I come into the office at 4:20 a.m. and turn on software that we use to track which articles and ticker pages generate the most interest among Yahoo Finance readers. Every day, one of the most visited pages on our platform is Nvidia’s.
The world could be on the verge of an alien attack, and I imagine people are still clicking “reload” on the Nvidia ticker page. Investors are obsessed with a company they hadn’t even heard of two years ago.
I can’t blame them.
Nvidia stock is up 170% in the last year. Nvidia stock is up 3,000% in the last five years.
These are insane gains that attract the less experienced investor hoping for an early retirement.
And Nvidia’s story is surprisingly easy to understand, despite the company’s incredibly complicated business model. Nvidia makes the best artificial intelligence chips in a world being turned upside down by AI. Simple. In terms of AI chip performance and future demand, no one comes close to Nvidia.
I would like to point out that Nvidia’s pre-earnings lineup is a little different this time around. While Wall Street remains very bullish on Nvidia ahead of its earnings report, they are a little cautious given the reported shipping delays for Nvidia’s powerful new Blackwell AI chip.
There are good reasons for this optimism, as evidenced by a number of recent signals from earnings reports:
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Taiwan Semiconductor (TSM) merely pointed to strong demand for AI in its report.
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AMD (AMD) recently increased its sales of data center chips for the third time in a year.
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Super Micro Computer (SMCI) cited strong demand for its liquid cooling solutions.
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Nvidia chip customer Meta (META) has just raised its investment forecast for 2024 and 2025 by billions.
“We expect Nvidia to beat or increase results, with the upside driven by strong demand for Hopper GPUs. Given the Blackwell delay, we believe Nvidia will prioritize the B200 ramp for hyperscalers and has effectively canceled B100. It will be replaced by a lower price-performance GPU (B200A) aimed at enterprise customers,” Keybanc analyst John Vinh said in a client note.
In order for Nvidia’s report to be accepted, I believe investors need to recognize at least two things:
If that happens, it could shake off some bears and set the stage for what EMJ Capital founder and technology investor Eric Jackson told me on the Opening Bid podcast.
“I say (Nvidia’s value) could double again by the end of the year,” Jackson said.
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To put this in perspective, Jackson believes Nvidia’s market cap could rise from around $3.2 trillion today to $6 trillion by year-end.
Jackson believes the company could achieve that goal if it delivers a very, very strong earnings report this week or in November (or both weeks) that shows continued demand for H100 and H200 chips while also showcasing the potential of the new AI-focused Blackwell chips.
Get some rest. You have a busy week ahead of you.
Three times a week I conduct insightful conversations with the biggest names in business and markets on my Opening bid Podcast. You can find more episodes on our Video Hub. See on your preferred streaming service. Or listen and subscribe on Apple Podcasts, Spotifyor wherever you find your favorite podcasts.
Brian Sozzi is editor-in-chief of Yahoo Finance. Follow Sozzi on X @BrianSozzi and further LinkedIn. Tips on deals, mergers, activist situations or other topics? Email [email protected].
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