Close Menu
Nvidia Stock Analysis

NVIDIA is the clear winner in a lackluster earnings season for big tech companies

NvidiaDailyBy 005 Mins Read

(Bloomberg) — While the tech giants’ results have largely disappointed this earnings season, there was also plenty of good news for Nvidia.

Most Read Articles on Bloomberg

The company’s biggest customers, including Microsoft Corp., Alphabet Inc., Amazon.com Inc. and Meta Platforms Inc., have all pledged to further increase their capital spending over the coming year. The four companies spent a combined $59 billion on data center equipment and other fixed assets in the third quarter, a record high for the quarter, according to data compiled by Bloomberg.

“If you own Nvidia, the big buyers have to keep buying and buying more every quarter,” said Mike Bailey, director of research at Fulton Blakefield Broeniman. “You can check that box.”

The tech giant’s spending plans were exactly what bulls were looking for to keep Nvidia’s stock price rising. The stock has nearly tripled this year and rose 4.1% to close at a record high on Wednesday amid a general stock market rally following Donald Trump’s election victory. The Santa Clara, California-based AI chip maker overtook Apple Inc. this week to once again become the world’s most valuable company.

Earnings at big tech companies are also painting a rosy picture ahead of NVIDIA’s own earnings report, scheduled for November 20th. NVIDIA stock lost nearly $900 billion in market value from its June high to its August low amid questions about return on investment in AI and delays in new products. blackwell chips. The company has since recovered, helped by reassurances from CEO Jensen Huang that Blackwell’s production is on track. Concerns have been further allayed by the latest evidence that AI spending is robust.

Wall Street analysts are overwhelmingly positive about Nvidia, with 67 of the 75 analysts tracked by Bloomberg rating the stock a “buy.” The company also continues to raise its estimates, with its profit forecast for next year increasing by about 10% over the past three months, according to data compiled by Bloomberg. This has helped keep Nvidia’s valuation in check, currently trading at about 39 times forward earnings, down from its peak of more than 60 times last year.

William Blair analysts Sebastian Nagy and Jason Ader were among those who raised their forecasts for fiscal 2026, writing in a recent note that “NVIDIA’s ability to maintain its market-leading position in AI infrastructure” Our confidence in this will only grow stronger.” The AI ​​appears to be “going full throttle,” they said.

story continues

Share.

Related Posts

Add A Comment
Leave A Reply