A Market-Defining Moment Approaches with NVDA's Upcoming Earnings
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Earnings season is in full swing, and the financial markets are buzzing with anticipation. When Federal Reserve Chairman Jerome Powell announced the decision to start cutting interest rates, it was a momentous occasion that resonated across the U.S. markets. With S&P, Nasdaq, and Russel all leading index jumping substantially.
However, the market's recent recovery from August's lows, triggered by carry trades and a surprise rate increase by the Japanese Central Bank, faces a key test with the upcoming earnings report from AI leader Nvidia Corp (NVDA:US), scheduled for release after the bell on Wednesday, August 28. Investors are keenly watching for updates on sustained data center growth and any developments regarding potential delays in the new Blackwell artificial intelligence (AI) chip.
Nvidia's stock has experienced a significant rebound in August, rising nearly 25%, despite a steep sell-off earlier in the year that saw its value drop by about 23%. This recovery has brought relief to investors, but concerns remain about the company's financial outlook.
In the first quarter of fiscal 2025, Nvidia projected Q2 revenue of approximately $28 billion, plus or minus 2%. While many analysts anticipate that the company might exceed these expectations, a sharp decline in earnings per share (EPS) is likely expected, due to the recent 10-for-1 stock split, even though the latest reported EPS was quite minute.
On the competitive front, Advanced Micro Devices Inc (AMD:US) is making strategic moves to challenge Nvidia, with one such being a $5 billion acquisition of cloud computing solutions firm ZT Systems. AMD aims to enhance its existing silicon and software capabilities and accelerate the deployment of large-scale AI infrastructure through this acquisition.
Meanwhile, in the realm of congressional trading, Nvidia has attracted significant interest from investors on Capitol Hill. Congressional trades involving Nvidia have totaled approximately $7.73 million this year, spanning 40 transactions.
While 25 of these were divestments totaling $1.53 million, the 15 buy trades totaled $6.20 million. One of the most successful trading politicians, former House Speaker Nancy Pelosi's husband made a significant investment earlier this year, acquiring 10,000 shares at $113.06 each, amounting to $1.13 million.
The upcoming earnings report by Nvidia is of critical importance, and if recent investments by noteworthy figures like Nancy Pelosi’s husband are any indication, the stock is positioned to maintain its upward momentum.
