Nvidia’s stock reached an all-time high on Tuesday, fueled by high hopes for the chip designer’s quarterly results. This company has been reaping the rewards of the AI boom and is at the forefront of it.
The company says revenue jumped to above $13.5bn for the three months to the end of June. That’s almost double than what they managed last time.
After initially surging to $481.87, a new record, the stock slightly pulled back by 1.1 per cent as the market opened. This was still above its previous peak of $480.88 set on July 14th.
Confidence is growing that Nvidia will once again outperform Wall Street’s revenue expectations, driving the stock up by about 19 per cent from its recent low point just last week.
Industry watchers are anticipating big things from Nvidia’s upcoming earnings report. They are predicting a remarkable 110 per cent growth in third-quarter revenue, totalling $12.50 billion. This report is being seen as a crucial one for this earnings season.
Reuters reported that Dennis Dick, an analyst specializing in market structure at Triple D Trading, stressed the significance of this report, saying, “This could be the highlight of the earnings season. We’re eager to hear that they can continue the momentum from their outstanding performance in the previous quarter.”
Back in May, Nvidia stunned the market by forecasting second-quarter revenue that exceeded expectations by more than 50 per cent. This move pushed its market value above $1 trillion, solidifying its position as the top performer on the S&P 500 index.
Nvidia’s optimistic forecasts from the previous quarter not only triggered a surge in AI-related stocks but also fueled a rally in the Big Tech sector. This phenomenon emerged as a major propellant for the overall upward momentum of US stocks throughout this year.
“To maintain the current stock price, we’d need to see the company’s profits align with the gains in share value,” explained Brian Mulberry, who manages client portfolios at Zacks Investment Management, an entity holding Nvidia shares.
A minimum of 19 financial firms have increased their projected target price for Nvidia this month alone, pushing the average estimation to $500. This marks a 6.5 per cent rise compared to the stock’s most recent closing value. Impressively, Nvidia shares have more than tripled in value since the beginning of this year.
According to a report released by Goldman Sachs on Monday, Nvidia witnessed the most notable surge in popularity among hedge funds during the second quarter.