After Gaining 229% in a Year, Nvidia’s Stock Price Hits Record High Day Before Earnings Report
Nvidia's stock reached a new all-time high on Monday, a day prior to its much-anticipated Q3 2024 earnings report.
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In an all-around positive session for the US stocks, Nvidia’s (NASDAQ: NVDA) shares climbed 2.2% on Monday to $504.20 – a fresh record high for the chipmaker. The surge to a new peak came just a day before Nvidia’s Q3 2024 report, which will provide a window into the latest AI demand trends, is due.
Nvidia Reaches a $1.25 Trillion Valuation
Nvidia’s shares rose more than 2% on Monday, printing a fresh all-time high ahead of its quarterly earnings report. The company’s stock closed the session at $504.20, propelling its valuation to $1.25 trillion.
The upswing underscores a remarkable 2023 rally for the Santa Clara, California-based chipmaker driven by continuing demand for AI services. Nvidia, which makes high-end chips that power generative AI solutions like ChatGPT, played a vital role in this tech revolution.
As a result, its stock price more than tripled this year, making it the best-performing S&P 500 constituent. Notably, most of the benchmark index’s impressive gains in 2023 have been fueled by the Magnificent Seven companies, including Nvidia.
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Wall Street’s Expectations of Nvidia’s Q3 Report
Nvidia’s latest record-breaking upswing in the stock market came a day before its financial report for the fiscal Q3 2024.
Investors will closely examine the results, which have recently served as a gauge of AI demand. Nvidia’s guidance will be particularly important as many attempts to analyze how recent US chip restrictions on shipments to China have impacted the demand. Nvidia could receive a particularly damaging blow from the constraints as it may be forced to cancel $5 billion worth of AI chip orders.
Analysts are largely bullish when it comes to the actual expectations for Nvidia’s Q3 performance.
Overall, Wall Street expects the company’s adjusted earnings to jump to $3.37 from $0.58 in the year–ago quarter. Meanwhile, revenue is projected to see a 173% year-over-year increase to a whopping $16.2 billion.
Analysts believe the expected strong performance could catalyze further gains in Nvidia’s shares. Susquehanna’s Christopher Rolland anticipates a “beat and raise” quarter from Nvidia, citing an improved supply chain, an impressive backlog, and the chipmaker’s efforts to boost capacity at existing suppliers. As such, Rolland hiked the price target on NVDA’s stock from $600 to $625, implying a potential upside of more than 23%.
Goldman Sachs analyst Toshiyari Hari is also bracing for a robust Q3 performance and encouraging guidance from Nvidia, saying the risk-reward profile is attractive at current levels. The strategist maintained a ‘Buy’ rating on NVDA, with a price target of $605.
Do you agree with analysts’ views that Nvidia would post a strong Q3 performance and see further upside in the stock market? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
