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Investor expectations for Nvidia’s upcoming earnings yarn are sky-excessive.
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JPMorgan stated Nvidia’s stock tag might perhaps maybe presumably negatively react to a blowout earnings yarn.
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“The larger the beat,” the extra the market will “accept as true with that provide is getting better,” JPMorgan stated.
All eyes will be on Nvidia after the market shut recently as the firm releases its fourth-quarter earnings yarn, and investor expectations are sky-excessive.
And even though Nvidia exceeds investor expectations when it reviews results and steerage, the stock might perhaps maybe presumably leer a detrimental response, a Wednesday ticket from JPMorgan’s buying and selling desk stated.
“If Jensen’s GPU behemoth is able to yarn worthy numbers, and by ‘worthy’ I mean 4Q DC revs north of $20 billion with implied acceleration for Q1 DC,” JPMorgan stated, referring to recordsdata-center revenues, “stock will be comely however this might occasionally also beg the ask as as to if or now not or now not provide is getting better.”
Nvidia has been provide-constrained for its H100 GPU chips for months as question has soared. The provision-question mismatch used to be so grisly over the summer that Elon Musk stated Tesla might perhaps maybe presumably now not aquire them fast ample.
“We’re the exercise of plenty of Nvidia hardware,” Musk stated on Tesla’s 2nd-quarter earnings name. “We are going to the truth is rob it as fast as they may be able to converse it to us. Frankly, if they might perhaps maybe converse us ample GPUs, we might perhaps maybe presumably now not need Dojo. But they may be able to’t. They’ve bought so many clients.”
But if provide constraints are starting up to ease, it must also even be a grisly signal for Nvidia, as that might perhaps maybe presumably result in a provide glut, which is now not unfamiliar for the semiconductor industry.
“The larger the beat on steerage, the extra the market goes to accept as true with that provide is getting better, and that there will be a listing correction in 2H24,” JPMorgan stated.
With dangers skewed to the downside for Nvidia’s stock following its big surge right by the final year, it appears to be like to be a lose-lose spot for the stock within the fast timeframe, with the bank announcing that Nvidia’s implied transfer of 11% is “certainly extra than provoking” if it misses analyst expectations.
“Soooo, grisly is grisly, factual is sufficient/grisly, however too factual will be now not factual,” JPMorgan stated.
Here’s what a ramification of Wall Avenue analysts are anticipating from Nvidia’s upcoming earnings yarn.
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