Nvidia Stock Rises Ahead of Earnings Report

Nvidia Stock Rises Ahead of Earnings Report

Nvidia (NVDA) shares saw a 1.4% increase to $926.43 early on Wednesday, riding the wave of a broader market uptick. This comes in the wake of the latest consumer price index showing a slight cooling in price increases for April, sparking optimism among investors. However, despite this morning’s rise, Nvidia’s extraordinary gains recorded in 2023 and earlier this year have recently stalled.

High Stakes for Upcoming Earnings Report

Nvidia’s upcoming first-quarter earnings report, set for May 22, garners significant attention amid fluctuating share prices. With expectations running high, the chip giant navigates the risk of disappointing investors, potentially echoing recent declines in semiconductor stocks like AMD and ARM. Should Nvidia merely meet projections, it risks a similar fate of stock price depreciation.

Wall Street consensus forecasts Nvidia to report revenue of $24.51 billion. However, KeyBanc analyst John Vinh suggests that to avoid disappointing investors, Nvidia would need to report revenue closer to $26 billion and provide second-quarter guidance around $28.5 billion.

Vinh expects Nvidia to exceed Q1 results and Q2 guidance expectations despite next-generation Blackwell GPUs. He sees limited demand slowdown signs. Vinh maintained an Overweight rating and a $1,200 price target on Nvidia stock.

Performance of Other Semiconductor Companies

In the semiconductor sector, other companies showed mixed performances. Advanced Micro Devices saw a 1.9% increase, while Intel (INTC) experienced a slight 0.1% decline in early trading.

Semiconductor sector shows variance: AMD up 1.9%, Intel down 0.1%, reflecting competitive dynamics, according to WSJ Subscription Offers.

Nvidia’s Impressive Stock Performance

Nvidia shares have surged 84% year-to-date through Tuesday’s close, significantly outperforming the broader market indices, which saw a 10% rise in both the S&P 500 index and the Nasdaq Composite over the same period.

CEO Compensation Surge

Nvidia’s stock rise boosted CEO Jensen Huang’s fiscal 2024 compensation to $34.2 million, up from $21.4 million in 2023. His stock awards increased to $26.7 million from $19.7 million. This notable rise was disclosed in Tuesday’s filing.

Despite this increase, Huang’s compensation remains considerably lower than that of Apple CEO Tim Cook, who earned $62.3 million, and Microsoft CEO Satya Nadella, who earned $48.5 million. Apple and Microsoft are the only two companies with a larger market capitalization than Nvidia.

As Nvidia gears up for its earnings report, the market will be closely watching to see if the company can continue its impressive growth trajectory and meet the lofty expectations set by analysts and investors alike.

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