Nvidia set to smash expectations (again) this week

The bullish prediction from Nigel Green of deVere Group comes ahead of what’s dubbed the “single most important earnings report of the year.”

Few companies have captured the market’s imagination as Nvidia has in 2023. With a stock that has skyrocketed by 150% this year alone and an eye-popping 3,000% surge over the past five years, Nvidia’s trajectory has been nothing short of phenomenal.

And while sceptics are waving caution flags, likening the company’s extraordinary rise to the dot-com bubble of two decades ago, and flagging current shipment issues, there are compelling reasons to believe that Nvidia’s best days are still ahead.

Nigel Green says: “The company has become the undisputed leader in artificial intelligence (AI) chips, a market segment that is poised to reshape industries across the globe. In a world increasingly dominated by AI-driven technologies, Nvidia stands head and shoulders above the competition.

“The company’s cutting-edge GPUs, particularly its Hopper architecture, are driving massive demand, and there is no clear competitor in sight that can match its performance.

“The result? A stratospheric rise in Nvidia’s stock and market cap that has far outpaced broader market gains.”

This week’s earnings report, coming after the close on Wednesday, could be a defining moment for the US markets.

“With Nvidia accounting for roughly a quarter of the S&P 500’s 17% gain year-to-date, all eyes are on whether the AI darling can continue its impressive streak.

“We believe Nvidia will deliver stellar results, outperforming both earnings expectations and forward guidance,” notes the deVere Group CEO.

The earnings season has been unforgiving to tech giants, with investors punishing companies whose results have failed to justify lofty valuations and extensive spending on AI.

However, Nvidia is uniquely positioned to buck this trend.

Recent signals from other companies in the tech ecosystem only bolster the bullish case for Nvidia.

Consider Taiwan Semiconductor (TSMC), a critical supplier in the chip industry, which just cited strong AI demand in its latest earnings report. AMD, another major player in the semiconductor space, has raised its sales forecasts for data centre chips three times in the past year, fueled by the same AI-driven demand that Nvidia is capitalising on. Super Micro Computer (SMCI), which is a key player in data centre hardware, has also reported robust demand for its liquid cooling solutions—technology crucial for running Nvidia’s high-performance GPUs.

Furthermore, Nvidia's key customer, Meta Platforms (META), just raised its capital expenditures guidance by billions for the coming years, signalling confidence in the long-term demand for Nvidia’s AI chips.

“This is a strong validation of Nvidia’s dominance in the AI space and sets the stage for a blockbuster earnings report,” affirms Nigel Green.

Yes, there are concerns.

Some bears argue that Nvidia’s astronomical gains will inevitably cool, especially amid reported shipment delays for its new AI chip, Blackwell.

But, deVere believes these worries are overblown. Nvidia’s leadership in AI chips isn’t just about today’s product lineup; it’s about the company’s unmatched ability to innovate and anticipate future needs in an AI-dominated world.

The deVere CEO concludes: “Nvidia’s upcoming earnings report will be a crucial test for the broader market’s AI-driven rally, but the signs point toward another strong showing.

“Expect Nvidia to not only meet but exceed expectations this week.”