The price of NVDA soared after publishing forward solid guidance earlier in the year. The next target on the upside is $480, with support at $400 being key to the rally.
NVDA – Daily Chart
Nvidia shares have almost tripled in value this year, with more than $700 billion added to the company’s market cap and making it the first trillion-dollar chip firm.
The strong rally means that there is no room for any earnings-related disappointment, and anything other than an earnings beat could see a sharp sell-off in the stock.
The results will also be a driver of the broader market this week, as most of the S&P 500’s gains this year have come from the AI-driven rally in Nvidia and Big Tech.
“I’ve been covering tech since 1994 and I have never seen an environment where you are so dependent on one company to deliver,” said Inge Heydorn at GP Bullhound, which owns both Nvidia and AMD shares.
“AI is really the last pillar of growth and everybody is depending on it. If Nvidia shows weakness, we could be in for quite a substantial correction in the market.”
Wall Street expects the chipmaker to give forward guidance for a rise of about 110% in third-quarter revenue to $12.50 billion, according to Refinitiv. Nvidia has forecast revenue below analysts’ estimates only once in the last two years.
Citi analysts said they were predicting a revenue forecast of around $12 billion last week, but buy-side expectations have gone up to $14 billion. The company’s CEO noted “surging” chip sales earlier in the year as corporations jumped on the AI bandwagon.
