What to expect from Nvidia’s report?

This week, all eyes are on Nvidia’s quarterly report.
People expect solid numbers, to the point that the S&P 500 index hit another all-time high in
anticipation.

It is fair to mention that even risk assets received a
boost from news of slowing inflation, which gave hope for an
earlier-than-expected Fed rate cut.

In any case, the bulls are once again ruling market
sentiment. If there is any chance of changing that sentiment, Mr. Huang’s
company will have to file a very gloomy report.

Is there any real reason to expect disappointment?

Demand for Nvidia’s artificial intelligence chips has
skyrocketed, and supply must increase to meet it, so it is difficult to foresee
any setbacks.

The outlook also appears to be trouble-free. Analysts are
optimistic about Nvidia’s upcoming Blackwell chips and predict a 40% price
increase compared to current ones.

What is the bottom line?

Nvidia is expected to post earnings of $5.59 per share and
quarterly solid revenue growth. Overall, people believe that Nvidia will
beat bank
estimates on revenue, earnings per share, and gross margins. But the big
question is, by how much?

Sales for the first quarter of 2025 are expected to be
around $24.610 million; for the second quarter, they’re looking at roughly
$26.720 million. But it’s suspected they’ll need sales north of $26.000 million
for the first quarter to impress.

What should be kept in mind?

Every rally comes to an end. Companies can’t keep growing
forever. Luckily for Nvidia, however, there is still plenty of room for growth
in the AI market.

So even if prices increase, demand for Nvidia’s chips
should remain strong. The real question is whether they can maintain their lead
in the AI chip market.

For now, however, the market seems quite optimistic. But
who knows what the future holds? Let’s wait and see what Nvidia’s CEO has to
say.

As for how overvalued Nvidia stock is?

Let’s just say they’re not exactly cheap. Nvidia’s current P/E
ratio is 34, well above the S&P 500. But given Nvidia’s earnings
growth rate compared to the index, maybe the price isn’t so crazy.

But given Nvidia’s earnings growth rate compared to the
index, maybe the price isn’t so crazy. Still, buying before the report drops is
a bit like gambling. So, if you’re thinking about it, be cautious.

This article was written by FL Contributors at www.forexlive.com.