Nvidia is set to take over the stock market (again)

That’s The Takeaway from today’s Morning Brief, which you can REGISTER to receive in your inbox every morning along with:

Are you ready for the most important earnings report of 2024?

Interestingly, this company won the award for the most important earnings report of 2024 (and every quarter of 2023) when it reported three months ago!

I’m talking about Nvidia (NVDA). Earnings are withdrawn on August 28th after trading closes.

Every day, I get to the office by 4:20 and fire up software we use to track which stories and ticker pages garner the most interest from Yahoo Finance readers. Every day, one of the most actively viewed pages on our platform is for Nvidia.

The world could be on the brink of an alien attack and I think people will keep hitting refresh on the Nvidia ticker page. Investors have become absolutely obsessed with a company they hadn’t even heard of two years ago.

I can’t blame them.

Nvidia shares are up 170% over the past year. Nvidia stock is up 3,000% over the past five years.

These are crazy gains, the kind that appeal to the less experienced investor hoping to retire early.

And Nvidia’s story is surprisingly easy to understand, despite the company’s incredibly complicated business. Nvidia makes the best AI chips in a world disrupted by AI. Simple. No one is even close to Nvidia in terms of AI chip performance and demand for insight.

I want to caution that the setup on Nvidia going into the quarterly report is a bit different in this regard. While The Street remains super bullish on Nvidia heading into print, they’re a little wary amid reported shipping delays for Nvidia’s new Blackwell AI chip.

There is good reason for optimism based on a number of recent signals from earnings reports:

• Taiwan Semiconductor (TSM) just cited strong AI demand when it reported.

• AMD ( AMD ) recently increased its data center chip sales for the third time in a year.

• Super Micro Computer (SMCI) cited strong demand for its liquid cooling solutions.

• Chip client Nvidia Meta ( META ) just raised its 2024 and 2025 capital spending guidance by billions.

“We expect Nvidia to report beat/increase results, where the upside will be driven by strong demand for Hopper GPUs. Given Blackwell’s delay, we believe Nvidia will prioritize the B200 ramp for hyperscaling and has effectively canceled the B100, which will be replaced. with a lower cost/performance GPU (B200A) aimed at enterprise customers,” Keybanc analyst John Vinh said in a note to clients.

The story continues

For Nvidia’s report to be accepted, I think investors need to see at least two things:

If that happens, it could shake off a few bears and set the stage for what EMJ Capital founder and tech investor Eric Jackson told me on the Opening Bid podcast.

“I’m saying (Nvidia’s value) could double again between now and the end of the year,” Jackson said.

To put that into perspective, Jackson believes Nvidia’s market cap could hit $6 trillion by the end of the year, up from $3.2 trillion today.

Jackson reasons that the company needs to get there by delivering a very, very strong earnings report this week or in November (or both) that shows continued demand for the H100 and H200 chips, while boosting the potential of its new AI-focused Blackwell chips.

Get some rest. It’s going to be a busy week.

Three times a week, I host insightful conversations with the biggest names in business and markets on me Opening offer podcast. Find more episodes on our website video hub. Take care of yourself your favorite streaming service. Or listen and subscribe to Apple Podcasts, Spotifyor wherever you find your favorite podcasts.

Brian Sozzi is the executive editor of Yahoo Finance. Follow Sozzi on X @BrianSozzi and further LinkedIn. Advice on deals, mergers, activist situations or anything else? Email [email protected].

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