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All Eyes on NVIDIA (NVDA) Q4 Earnings Today

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Wednesday, February 21st, 2024

This Hump Day, we play the waiting game, for the most part. One of the most conspicuous companies on Wall Street — NVIDIA (NVDA - Free Report) , the leader of the so-called “Magnificent 7” stocks, +230% over the past year — reports Q4 earnings after today’s closing bell. While this company had been priced for perfection, running up to fresh all-time highs one week ago, we’ve seen traders pull back in the past couple days, including a -2% drop in today’s pre-market.

Expectations are still high for the graphics processing innovator, which has built itself up to the third-largest publicly traded corporation by market cap, behind just Apple (AAPL - Free Report) and Microsoft (MSFT - Free Report) . NVIDIA’s ubiquity is by now well known: we wouldn’t have video games, cryptocurrency, generative AI, etc. to the extent we currently understand them without NVIDIA supplying GPUs to these sub-industries. Earnings estimates are currently projected to have risen over +400% year over year.

Yesterday’s -4.5% selloff was the biggest single-day drop for NVIDIA thus far in 2024. This serves a dual purpose for market participants ahead of this afternoon’s report: a.) either NVIDIA posts a surprise that is less than the +22.4% trailing three-quarter average earnings beat, thereby disappointing investors and sending the stock into a bigger selloff, or b.) it provides a springboard higher in the case of better-than-expected earnings results later today.

Also later today, but before the closing bell rings, minutes for the latest Federal Open Market Committee (FOMC) meeting will be made public, allowing analysts to parse the language and opinion of members on how hot or cold the Fed was as of January 31st. These news events have in the past been useful tools in predicting further Fed action, but key jobs and inflation reports (Employment Situation, CPI, PPI, etc.) have been more decidedly in one direction — hotter — than speculation had been as of late last month. In short, no Fed minutes are likely to increase the odds of a rate cut at the next FOMC meeting, which ends March 20th.

Not exactly a direct competitor to NVIDIA, but a major semiconductor producer nevertheless, Analog Devices (ADI - Free Report) reported fiscal Q1 results ahead of today’s open. The Zacks Rank #4 (Sell)-rated company beat expectations slightly on both top and bottom lines — +2 cents to $1.73 per share on $2.51 billion in sales, better than the $2.50 billion in the Zacks consensus — but guidance for the coming quarter were lower than previous estimates on both top and bottom lines. Shares are trading down -1% in today’s early session. The stock is -2% year to date.

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