We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The Zacks Analyst Blog Highlights NVIDIA, Super Micro Computer, Meta, Microsoft, and Amazon.com
Read MoreHide Full Article
For Immediate Release
Chicago, IL – November 20, 2024 – Zacks.com announces the list of Stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: NVIDIA Corporation (NVDA - Free Report) , Super Micro Computer, Inc. (SMCI - Free Report) , Meta Platforms, Inc. (META - Free Report) , Microsoft Corporation (MSFT - Free Report) , and Amazon.com, Inc. (AMZN - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
NVIDIA Stock: Buy, Hold, or Sell Before Q3 Earnings?
From the initial public offering (IPO) at the beginning of 1999 till last year, NVIDIA Corporation has given an annualized compounded return of 33%, the best growth rate in the past two decades of trading in U.S. stock exchanges.
This year, NVIDIA joined the Dow as it became the barometer of the expanding artificial intelligence (AI) industry, and is currently the most valuable company. NVIDIA’s shares have soared 186.8% this year.
Therefore, market participants are eagerly anticipating NVIDIA’s third-quarter fiscal earnings report, which could significantly impact its share price and the broader tech sector.
They are contemplating selling NVIDIA’s shares and booking profits or buying them hoping for better future returns. Let us thus look at how investors should play the NVIDIA stock ahead of its earnings.
NVIDIA Stock May Get a Short-Term Boost From Q3 Results
AI server components are necessary for NVIDIA’s AI-related products, and any operational disruptions from suppliers may impact the semiconductor giant’s fiscal third-quarter results.
Regarding such suppliers, Super Micro Computer, Inc.’s financial instability and recent criticism from Hindenburg Research raised concerns about the company’s capabilities to meet NVIDIA’s demands.
However, the increasing adoption of AI and several other data-intensive applications would boost NVIDIA’s AI and data center business in the fiscal third quarter.
The increase in demand for graphic processing units (GPUs) among Meta Platforms, Inc. and Microsoft Corporation, to name a few, should continue to improve NVIDIA’s operational profitability in the reporting quarter.
NVIDIA anticipates an 80% surge in sales to $32.5 billion in the reporting quarter due to strong demand for current-generation Hopper GPUs. The company is projected to report earnings per share of $0.74 for the fiscal third quarter, up over $0.40 from the previous year, showing an 85% increase.
NVIDIA’s average four-quarter earnings surprise is a positive 12.7%, implying that it has a fair chance to display earnings growth in the upcoming earnings release on Wednesday, after the bell, likely impacting its stock positively.
Factors Boosting NVIDIA’s Long-Term Share Price
Encouraging fiscal third-quarter earnings reports may have a short-term positive impact on the share price. However, several other factors may lift NVIDIA’s share price in the long run.
On the third-quarter earnings call, NVIDIA is expected to share positive news about its much-awaited next-generation Blackwell GPU, demand for which is already insane, per CEO Jensen Huang. The new B200 chips have more AI throughput than H100 chips and have already been booked for the next 12 months, claimed management.
While Blackwell GPUs are poised to generate high revenues from the fourth quarter onward due to increased production, capital expenditures rising among NVIDIA’s customers should also enhance profit margins and raise the stock price. For instance, Amazon.com, Inc. and Meta expect their capital expenditures to increase to $75 billion and $40 billion in 2024 due to an increase in AI demand.
Anyhow, NVIDIA’s strong fundamentals make it the most valuable company, unswervingly boosting its share price. NVIDIA has steadily increased its cash flow and is expected to witness notable growth from Blackwell-related revenues.
The company’s free cash flow jumped from $4.3 billion in FY20 to $26.9 billion in FY24. This helped NVIDIA settle obligations and expand business through reinvestments.
NVIDIA has efficiently managed its expenses since it has a net profit margin of 55%, higher than the Semiconductor - General industry’s 47.3%. Any reading above 20% shows a high profit margin.
NVIDIA also generated profits proficiently as its return on equity (ROE) of 120% surpassed the industry average of 78.3%, indicating that its net income exceeds equity.
NVIDIA Stock is Less Pricey – Here’s How to Trade it
NVIDIA’s strong cash flows, capability to make profits competently, manage costs efficiently, increase in customer’s capital spending, rising demand for Blackwell, and projected year-over-year uptick in third-quarter earnings are expected to drive up the NVDA stock value, presenting an attractive buying opportunity (read more: This Is Why NVIDIA Joined the Dow; And Why It's Time to Buy).
Additionally, buying the NVDA stock won’t burn a large hole in your pocket. Per the price/earnings, the NVDA stock trades at 49.4X forward earnings, less than the industry’s 58.5X forward earnings multiple.
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
The Zacks Analyst Blog Highlights NVIDIA, Super Micro Computer, Meta, Microsoft, and Amazon.com
For Immediate Release
Chicago, IL – November 20, 2024 – Zacks.com announces the list of Stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: NVIDIA Corporation (NVDA - Free Report) , Super Micro Computer, Inc. (SMCI - Free Report) , Meta Platforms, Inc. (META - Free Report) , Microsoft Corporation (MSFT - Free Report) , and Amazon.com, Inc. (AMZN - Free Report) .
Here are highlights from Tuesday’s Analyst Blog:
NVIDIA Stock: Buy, Hold, or Sell Before Q3 Earnings?
From the initial public offering (IPO) at the beginning of 1999 till last year, NVIDIA Corporation has given an annualized compounded return of 33%, the best growth rate in the past two decades of trading in U.S. stock exchanges.
This year, NVIDIA joined the Dow as it became the barometer of the expanding artificial intelligence (AI) industry, and is currently the most valuable company. NVIDIA’s shares have soared 186.8% this year.
Therefore, market participants are eagerly anticipating NVIDIA’s third-quarter fiscal earnings report, which could significantly impact its share price and the broader tech sector.
They are contemplating selling NVIDIA’s shares and booking profits or buying them hoping for better future returns. Let us thus look at how investors should play the NVIDIA stock ahead of its earnings.
NVIDIA Stock May Get a Short-Term Boost From Q3 Results
AI server components are necessary for NVIDIA’s AI-related products, and any operational disruptions from suppliers may impact the semiconductor giant’s fiscal third-quarter results.
Regarding such suppliers, Super Micro Computer, Inc.’s financial instability and recent criticism from Hindenburg Research raised concerns about the company’s capabilities to meet NVIDIA’s demands.
However, the increasing adoption of AI and several other data-intensive applications would boost NVIDIA’s AI and data center business in the fiscal third quarter.
The increase in demand for graphic processing units (GPUs) among Meta Platforms, Inc. and Microsoft Corporation, to name a few, should continue to improve NVIDIA’s operational profitability in the reporting quarter.
NVIDIA anticipates an 80% surge in sales to $32.5 billion in the reporting quarter due to strong demand for current-generation Hopper GPUs. The company is projected to report earnings per share of $0.74 for the fiscal third quarter, up over $0.40 from the previous year, showing an 85% increase.
NVIDIA’s average four-quarter earnings surprise is a positive 12.7%, implying that it has a fair chance to display earnings growth in the upcoming earnings release on Wednesday, after the bell, likely impacting its stock positively.
Factors Boosting NVIDIA’s Long-Term Share Price
Encouraging fiscal third-quarter earnings reports may have a short-term positive impact on the share price. However, several other factors may lift NVIDIA’s share price in the long run.
On the third-quarter earnings call, NVIDIA is expected to share positive news about its much-awaited next-generation Blackwell GPU, demand for which is already insane, per CEO Jensen Huang. The new B200 chips have more AI throughput than H100 chips and have already been booked for the next 12 months, claimed management.
While Blackwell GPUs are poised to generate high revenues from the fourth quarter onward due to increased production, capital expenditures rising among NVIDIA’s customers should also enhance profit margins and raise the stock price. For instance, Amazon.com, Inc. and Meta expect their capital expenditures to increase to $75 billion and $40 billion in 2024 due to an increase in AI demand.
Anyhow, NVIDIA’s strong fundamentals make it the most valuable company, unswervingly boosting its share price. NVIDIA has steadily increased its cash flow and is expected to witness notable growth from Blackwell-related revenues.
The company’s free cash flow jumped from $4.3 billion in FY20 to $26.9 billion in FY24. This helped NVIDIA settle obligations and expand business through reinvestments.
NVIDIA has efficiently managed its expenses since it has a net profit margin of 55%, higher than the Semiconductor - General industry’s 47.3%. Any reading above 20% shows a high profit margin.
NVIDIA also generated profits proficiently as its return on equity (ROE) of 120% surpassed the industry average of 78.3%, indicating that its net income exceeds equity.
NVIDIA Stock is Less Pricey – Here’s How to Trade it
NVIDIA’s strong cash flows, capability to make profits competently, manage costs efficiently, increase in customer’s capital spending, rising demand for Blackwell, and projected year-over-year uptick in third-quarter earnings are expected to drive up the NVDA stock value, presenting an attractive buying opportunity (read more: This Is Why NVIDIA Joined the Dow; And Why It's Time to Buy).
Additionally, buying the NVDA stock won’t burn a large hole in your pocket. Per the price/earnings, the NVDA stock trades at 49.4X forward earnings, less than the industry’s 58.5X forward earnings multiple.
NVIDIA currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.