Nvidia stock rises on Q3 earnings beat fueled by data centers, Palo Alto Networks falls

Market Overview - All three major indices closed in positive territory, with the Dow gaining 47 points (0.1%), the Nasdaq Composite up 0.6%, and the S&P 500 rising 0.4% [2][4] - The S&P 500 equal-weighted index declined, indicating a lack of market breadth, with larger stocks driving the price returns [3] Sector Performance - Technology sector (XLK) led the market with a gain of 0.7%, followed by financials, industrials, and materials [4] - Consumer discretionary sector ended slightly in the red, while energy was the worst-performing sector, down 1.28% [4][5] Nvidia Earnings Expectations - Nvidia is expected to report Q3 earnings with a consensus revenue estimate of $62 billion, with analysts predicting a potential beat of at least $1 billion [33][36] - Nvidia's CEO mentioned a demand of $500 billion for AI-related business over the next two years, suggesting significant growth potential [37][38] Nvidia Q3 Earnings Results - Nvidia reported Q3 revenue of $57.01 billion, exceeding the street estimate of $55.19 billion, and data center revenue of $51.2 billion, beating the estimate of $49.34 billion [47][48] - Guidance for Q4 revenue is set at $65 billion, surpassing the estimate of $62 billion, with gross margins expected to be around 75% [48][49] Analyst Insights on Nvidia - Analysts believe Nvidia's strong performance is indicative of broader AI spending trends, with significant demand for its chips [40][41] - Concerns about the AI trade persist, but the current quarter's results are expected to alleviate some investor anxiety [53][54] - Valuation for Nvidia is considered attractive relative to historical levels, with a projected free cash flow potential that supports higher multiples [56][58]