Nvidia Stock Dips, But Record High Still Within Reach

Nvidia's stock declined last week, but it stayed close to its all-time high as the chipmaker's earnings release approaches.

Written by: Arslan Ali Butt • Tuesday, May 21, 2024 • 2 min read

• Last updated: Tuesday, May 21, 2024

Nvidia’s stock declined last week, but it stayed close to its all-time high as the chipmaker’s earnings release approaches. The stock dropped 0.3% on Thursday, mirroring the broader market’s movements, after briefly surpassing its record closing high of $950.02.

On May 22, Nvidia is set to report its first-quarter earnings, which are expected to confirm robust demand for its chips that power artificial intelligence systems.

Nvidia Revenue Projections and Innovation Drive Market Expectations

FactSet projects Nvidia’s revenue to be $24.53 billion, but many analysts believe the company must report closer to $26 billion and provide optimistic guidance for the current quarter to satisfy high market expectations. Analysts are particularly interested in how Nvidia’s NVL72 rack system of networked chips can drive future growth.

Rich Schafer from Oppenheimer noted that Nvidia’s expansion into rack-scale systems strengthens its market position compared to competitors. Schafer maintained an Outperform rating and set a $1,100 target price for Nvidia shares.

To maintain its leading position in AI chip technology, Nvidia must continue innovating, especially as competitors aim to capture market share. On Thursday, Microsoft announced plans to offer Advanced Micro Devices’ (AMD) MI300X processors to cloud computing customers as an alternative to Nvidia technology. Following this announcement, AMD’s stock rose by 1.5%, while Intel, another competitor in AI chips, saw a slight decrease of 0.2%.

Key Points:

Revenue Expectations: Analysts believe Nvidia needs to report around $26 billion in revenue.
Focus on Innovation: The NVL72 rack system is expected to drive future growth.
Competitive Landscape: Microsoft plans to offer AMD’s MI300X processors as an alternative to Nvidia.

Nvidia shares have surged 91% this year, outperforming the S&P 500 index and the Nasdaq Composite Index, both of which increased by 11% over the same period. This highlights the strong market confidence in Nvidia’s growth prospects and innovation capabilities.

With Nvidia set to announce its first-quarter earnings on May 22, all eyes will be on whether it can meet these high expectations and maintain its competitive edge in the rapidly evolving AI chip market.

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ABOUT THE AUTHOR See More

Arslan Ali Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Ali Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.