NVIDIA Stock Projected to Surge by 2.6 Times Intel’s Market Capitalization

NVIDIA Stock Projected to Surge by 2.6 Times Intel’s Market Capitalization

Please note that this content is not intended as investment advice, and the author holds no positions in any of the mentioned stocks.

NVIDIA’s Anticipated Earnings Announcement

This afternoon, all eyes will be on NVIDIA as the tech powerhouse gets ready to announce its quarterly financial performance. Market analysts predict significant movements in the stock, reflecting heightened anticipation from investors.

Market Expectations on Stock Movement

The options market is currently forecasting notable fluctuations in NVIDIA’s stock price, estimating potential movements between $10.50 and $13.05. The lower figure is derived from at-the-money options’ extrinsic values, while the upper figure reflects bid prices of both call and put options set to expire on Friday.

Tweet on NVDA's market cap impact per point, comparing with INTC.

The Impact on Market Capitalization

To put this into perspective, just a $4 movement in NVIDIA’s shares is equivalent to Intel’s entire market capitalization of approximately $100 billion. Therefore, the current market sentiment suggests NVIDIA stock could fluctuate at a factor between 2.6 and 3.26 times Intel’s market cap by the end of the week.

After-Hours Trading Predictions

As is customary, the most significant share price adjustments are expected to occur during after-hours trading today, potentially setting the stage for a lively market reaction.

Analysts’ Predictions for Earnings Performance

Turning to NVIDIA’s expected earnings, Wall Street analysts believe the company will post a strong earnings surprise, primarily driven by the rapid production increase of GB200 chips and the commencement of GB300 chip production.

According to projections, NVIDIA is likely to surpass its own revenue guidance of $45 billion for the recently concluded quarter, with estimates for the upcoming October quarter suggesting figures between $53 billion and $54 billion, as indicated by JPMorgan’s analysis.

Revenue Considerations and Challenges

The revenue of $44 billion reported for the quarter ending in April included approximately $4.5 billion from H20 GPU sales. Given the uncertainties surrounding the future of this chip, particularly in China, JPMorgan advocates for a revised revenue baseline that excludes H20 sales. If NVIDIA maintains this trajectory, the anticipated quarter-over-quarter revenue increase could range between $6.5 billion and $7.5 billion for the July-ending quarter.

The H20 GPU remains a significant variable in these forecasts. Currently, NVIDIA’s H20 inventory holds a value of about $1.9 billion, which could translate into ancillary revenues of $5 billion to $6 billion if fully sold. Analysts estimate that for every 100, 000 units sold in China, NVIDIA earns an additional $1 billion; thus, potential sales could lead to an incremental revenue boost of $3 billion to $4 billion over the next two to three quarters.

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