NVIDIA Is Poised to Dominate the Stock Market (Again)

This is what I took away from today’s morning briefing, which you can subscription To be delivered to your inbox every morning 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 in 2023) when it reported three months ago!

I’m talking about Nvidia (NVDA). It’s due out on August 28 after the close of trading, and that could mean big things for AI trading, as Morning Brief co-host Seana Smith points out.

Every day, I arrive at the office by 4:20 a.m. and fire up some software we use to track the stories and news pages that are getting the most attention from Yahoo Finance readers. Every day, one of the most viewed pages on our platform is Nvidia.

The world may be about to be attacked by aliens, and I imagine people will still be hitting refresh on Nvidia’s news page. Investors are completely obsessed with a company they had never heard of two years ago.

I can’t blame them.

Nvidia shares have risen 170% in the past year. Nvidia shares have risen 3,000% in the past five years.

These are crazy gains, the kind that attract less experienced investors hoping to retire early.

Surprisingly, Nvidia’s story is easy to understand despite the company’s incredibly complex business. Nvidia makes the best AI chips in an AI-dominated world. It’s simple. No one comes close to Nvidia in terms of AI chip performance and future demand.

I would caution that the buildup to Nvidia’s quarterly report is a little different this year. While the Street remains very bullish on Nvidia ahead of the press, they are a bit cautious amid reports of a delay in shipping Nvidia’s powerful new AI chip, Blackwell.

There’s good reason for this optimism based on a number of recent signals from earnings reports:

• Taiwan Semiconductor (TSM) just pointed to strong demand for AI when it reported.

• AMD recently increased its data center chip sales for the third time in a year.

• Super Micro Computer Corporation (SMCI) has reported strong demand for its liquid cooling solutions.

• Meta (META), an Nvidia chip customer, just raised its 2024 and 2025 capital expenditure guidance by billions of dollars.

“We expect Nvidia to report better-than-expected results, with the upside driven by strong demand for Hopper GPUs,” Keybanc analyst John Vinh said in a note to clients. “Given the Blackwell delay, we believe Nvidia will prioritize increasing B200 production for developers, effectively canceling the B100, which will be replaced by a lower-cost, lower-performance GPU (B200A) targeted at enterprise customers.”

The story continues

In order to accept Nvidia’s report, I think investors need to see at least two things:

If this happens, it could undo some of the downside and pave the way for what EMJ Capital founder and tech investor Eric Jackson told me on Opening Bid.

“I say [Nvidia’s value] “Production could double again between now and the end of the year,” Jackson said.

To put that into perspective, Jackson believes Nvidia’s market cap could reach $6 trillion by the end of the year, compared to $3.2 trillion or so currently.

Jackson sees the company on the cusp of achieving that goal by delivering a very strong earnings report this week or in November (or both), showing continued demand for the H100 and H200 chips while enhancing the capabilities of Blackwell’s new AI-focused chips.

Take a break, next week is going to be busy.

Three times a week, I have thought-provoking conversations with the biggest names in business and markets on Opening show Podcast. You can find more episodes on our website. Video CenterWatch on your screen. Favorite streaming serviceOr listen and subscribe on Apple Podcast, SpotifyOr wherever you find your favorite podcasts.

Brian Sozzi He is the editor-in-chief of Yahoo Finance. Follow Sozzi on X @Brian Suzy And on LinkedInDo you have advice on deals, mergers, activist positions or anything else? Email [email protected].

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