Investing.com - Investors will once again be keeping an eye on macro data and corporate earnings this week. In the latter, one of the top stories is NVIDIA, which reports its numbers on Wednesday, May 22.
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‘If there is one event that generates particular anticipation among investors on the business side, Nvidia's first-quarter results presentation is, I'm afraid, the relevant one. We are facing more than a financial event; we are facing a great thermometer to measure the pulse of the artificial intelligence revolution and its impact on global markets", highlights Javier Molina, senior market analyst at eToro.
‘Against a backdrop of high expectations for company growth, Nvidia is in the spotlight, and its results could be the catalyst the market needs to continue to move strongly or... the opposite,’ adds Molina.
The role of AI
‘Let's not forget that much of the high valuation of US mega-companies is related to the AI narrative. This is why in a context where results are expected to justify the high capital expenditure on AI by many listed companies, Nvidia will reflect whether reality matches expectations and will be the catalyst for AI-related companies. There is also a growing concern about the payback periods for those investments in part of the investment community,’ explains the eToro expert.
‘In this context, Nvidia's accounts are of significant importance, as the company is seen as central to the broader AI narrative because of its strategic position in the AI ecosystem. Nvidia is not only leading the way in AI hardware development but also driving innovations that are shaping the future of AI,’ says Molina.
‘The market will be watching Nvidia's results closely, looking for signs that confirm the continued growth and sustainability of AI investments. A positive performance could bolster confidence in the technology sector and stimulate new investment, while any signs of a slowdown could raise concerns among investors,’ he concludes.
What to expect from its results and what to do with the stock?
According to the professional tool InvestingPro, analysts have increased their earnings per share (EPS) expectations for this quarter by 309.1% from 1.36 per share to 5.57 per share over the last 12 months.
Source: InvestingPro
Looking at its strengths and weaknesses, Nvidia's ProTips are both positive and negative. They are these:
Source: InvestingPro
The market value of Nvidia according to InvestingPro on Wednesday is $788, and the risk is medium.
Source: InvestingPro
Here's the historical evolution of how Nvidia shares have been affected by previous earnings presentations:
Source: InvestingPro
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