Nvidia, the chip giant, experienced its worst day in four months as it saw a 4.4% decline in its stock on Tuesday, resulting in a staggering $78 billion loss in market capitalization. This marks the largest single-day loss in market cap in the company’s history, surpassing the previous record set in May 2023.
Despite the significant drop, Nvidia’s stock has surged by over 35% since the beginning of the year, reflecting heightened market expectations. Analysts at HSBC, including Frank Lee, believe that the company’s share price rally has led to a substantial increase in overall market expectations, potentially limiting further earnings upside in 2024 compared to the surprises witnessed in 2023.
For the fiscal fourth quarter ending in January, analysts anticipate Nvidia to report adjusted earnings of $4.59 per share on a revenue of $20.4 billion, representing a more than 400% increase in earnings and a tripling of revenue. Projections for the current quarter also indicate staggering numbers, with expected adjusted EPS of $5.02 and revenue of $22.2 billion, reflecting over 350% growth in earnings and triple the revenue from the previous year.
However, the outlook for Nvidia appears challenging, with Mizuho analyst Jordan Klein expressing concerns about the high bar set for the company. While he refrains from making a call on the quarter, Piper Sandler analyst Harsh Kumar anticipates Nvidia to forecast data-center revenue $400 million to $500 million above the consensus view, implying approximately 10% growth on a sequential basis.
As Nvidia prepares to release its quarterly earnings, the market is closely monitoring the company’s performance amidst heightened expectations and the recent market-cap loss. Despite the challenges and uncertainties, Nvidia’s upcoming results are highly anticipated, and investors eagerly await the company’s financial outlook and performance.
