On Saturday I posted–on my subscription JubakAM.Com site, that Nvidia’s (NVDA) earnings report on November 17–that is today–and the market reaction to the company’s quarterly earnings report would tell us a lot about market sentiment and the magnitude of any year-end, market melt up rally.
Wall Street analysts were projecting that the company would announced earnings of 95 cents a share for the quarter that ended in October. That would be a huge 58% increase from the 60 cents a share reported for the October 2020 quarter, I
But, I worried, that much of that number was already in the share price. The stock is up 47% in the last month and 133% for the year to date.
Would the stock drop especially if all the company did was meet expectations?
We’ll never know–since Nvidia beat expectations when it reported today. The company earned an adjusted $1.17 a share on sales of $7.1 billion for the period ended in October. Analysts had forecast Nvidia earnings of $1.11 a share on sales of $6.82 billion. Year over year earnings jumped 60% while sales increased 50%.
In the third quarter, Nvidia’s data-center revenue increased 55% from a year earlier to $2.94 billion. And sales of graphics chips for computer games rose 42% to $3.22 billion.
For the current quarter that ends in January, Nvidia forecast revenue of $7.4 billion, up 48% from the year-earlier period. Wall Street was forecasting sales of $6.89 billion for the current quarter.
And the market reaction? Well, in after-hours trading the stock as up 5.09% after falling 3.12% in the regular trading session.
Two questions for tomorrow: Will investors and traders as a whole follow today’s after-hours lead? And will this earnings beat on one of the most aggressive momentum picks of the recent market lead to another upward leg in the end of the year rally?
My opinion is “Yes” and “Yes.” But the actual market action tomorrow will tell.
I own shares of Nvidia in my long-term 50 Stocks Portfolio (gain of 116% since initiation of this position on October 21, 2020) and in my Millennial Portfolio on my subscription JubakAM.com site (gain of 51% since initiation of this position on July 22,2021.)