It has been a jam-packed fourth-quarter earnings eve for Nvidia Corp, with the fabless semiconductor titan overtaking Tesla Inc (NASDAQ:TSLA, ETR:TL0) as Wall Street’s most-traded stock, all the while getting slapped over 6% lower in morning US trades.
Data compiled by the London Stock Exchange Group and shared by Reuters shows that Nvidia’s 30-day average turnover has flipped Tesla Inc (NASDAQ:TSLA, ETR:TL0), making it officially Wall Street’s number-one trade.
This follows Nvidia’s market capitalization flipping Google parent Alphabet Inc (NASDAQ:GOOG) as America’s third-largest corporation, mere weeks after besting Amazon.com Inc (NASDAQ:AMZN, ETR:AMZ) for the fourth spot.
Evidently, not all Nvidia trades were bullish; the trillion-dollar megacap just got tossed 6.2% lower when markets opened this morning.
Not that that takes much of the shine off the stock as a whole- it is still up over 40% year to date after rallying a walloping 230% throughout 2023.
Still, it raises the question - is the market anxious about what Nvidia might or might not disclose in tomorrow’s fourth-quarter earnings call?
The group is expected to post a quarterly revenue target of $20 billion on a 74.5% gross margin.
That would make for another all-time quarterly record following an $18.1 billion top-line figure in the third quarter and $13.5 billion in the second quarter of its annus mirabilis.
Both of these quarterly results represented significant, multibillion-dollar forecast beats.
On the back of such lofty precedents, Nvidia risks disappointing the market with anything less than a phenomenal outcome.
Front and centre will be sales in the data center segment, which houses sales of Nvidia’s flagship ‘H’ range of artificial intelligence-focused chips.
Rivals Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD) and even Intel Corp (NASDAQ:INTC, ETR:INL) are ramping up their AI chip offerings, with the former’s MI300X turning industry heads and winning orders from big-ticket clients including Microsoft, Meta and even OpenAI, which famously uses Nvidia chips to power its landmark ChatGPT large-language model.
With competition beginning to eye up Nvidia’s lunch, pricing pressure will be another thing under the market’s microscope tomorrow.
Nvidia is still considered the gold standard of AI computing hardware, but tomorrow’s earnings – or more importantly, future guidance – are not a closed book.
The performance anxiety is real.