Tomorrow's Nvidia (NVDA) quarterly earnings announcement will be the most watched earnings report of the quarter. Not only will Nvidia’s shareholders pay close attention, but many non-shareholders will watch as the results could have a big impact on the entire market. Quite simply, not only has Nvidia’s stock been the poster child for all that AI offers, but its earnings have been a massive driver of S&P 500 earnings. The graph on the left, courtesy of BofA Global Research, highlights that Nvidia’s earnings have accounted for about a third of the entire S&P 500 earnings growth over the past two quarters.
So what is the market expecting? Wall Street consensus expectations are for revenue growth of more than +230% and earnings growth of +400%, year over year. As shown on the right side, options prices imply a +/- 8.5% move on Nvidia’s earnings report. That equates to roughly $200B in market cap. Put another way, Nvidia is expected to add or lose McDonald’s market cap ($196B) Wednesday afternoon. Beating expectations may not be enough to push Nvidia’s stock higher. Given its incredible outperformance, investors may not only want revenues and EPS to come in above estimates but also be banking on the company to increase its earnings guidance for the coming quarters.
Lance Roberts
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