Jensen Huang, the chief executive of Nvidia, dismissed suggestions of a bubble - Lisi Niesner/Reuters Nvidia has insisted it is not facing an Enron-style financial scandal, as the chipmaker hit back at short-sellers betting against an AI bubble. The world’s most valuable company has sought to ease market concerns by writing to analysts to contest claims by Michael Burry, the trader who predicted the 2008 housing crisis. In particular, Nvidia said it is not artificially inflating revenues, rejecting clai ...

Core Insights - Nvidia Corp. provided a strong revenue forecast of approximately $65 billion for the January quarter, exceeding analyst expectations by about $3 billion, and indicated that a potential revenue bonanza of half a trillion dollars may be larger than anticipated [1][2] - The company’s CEO, Jensen Huang, dismissed concerns about an AI bubble, stating that demand for Nvidia's AI accelerators remains robust [2][5] Financial Performance - Nvidia's third-quarter revenue rose 62% to $57 billion, surpassing analysts' estimates of $55.2 billion, with earnings of $1.30 per share compared to the expected $1.26 [7] - The data center unit generated $51.2 billion in revenue, exceeding the average estimate of $49.3 billion, while gaming PC chips brought in $4.3 billion, slightly below the expected $4.4 billion [8] Market Reaction - Following the positive outlook, Nvidia's shares increased by approximately 5.4% in early trading, contributing to a 39% gain for the year, resulting in a market value of $4.5 trillion [2][3] - Related stocks, such as CoreWeave Inc. and Nebius Group NV, also saw significant gains, reflecting Nvidia's influence on the AI sector [3] Future Outlook - Nvidia's CEO indicated that the company could exceed the previously announced $500 billion revenue target due to ongoing demand for AI products [5][6] - The company is positioned to deliver more annual net income than competitors Intel Corp. and Advanced Micro Devices Inc. will report in sales [9] Competitive Landscape - Despite Nvidia's dominance in the AI accelerator market, competitors like AMD, Broadcom Inc., and Qualcomm Inc. are optimistic about challenging Nvidia's position [14] - Nvidia maintains over 90% market share in AI accelerator chips, bolstered by a diverse product lineup that includes networking and software solutions [17]

Company Performance - Nvidia's stock closed at $182.16, reflecting a +1.04% increase from the previous day, outperforming the S&P 500's gain of 0.58% [1] - Over the past month, Nvidia's stock has risen by 1.87%, while the Computer and Technology sector experienced a loss of 0.5% [1] Earnings Projections - Nvidia's upcoming earnings per share (EPS) are projected to be $1.23, indicating a 51.85% increase year-over-year [2] - Revenue is expected to reach $54.55 billion, representing a 55.49% growth compared to the same quarter last year [2] Annual Estimates - For the annual period, earnings are anticipated to be $4.45 per share, with revenue projected at $204.8 billion, reflecting increases of +48.83% and +56.94% respectively from the previous year [3] Analyst Sentiment - Recent changes in analyst estimates for Nvidia suggest a positive outlook, indicating optimism regarding the company's business and profitability [3][4] Zacks Rank - Nvidia currently holds a Zacks Rank of 2 (Buy), with a historical average annual return of +25% for stocks rated 1 since 1988 [5] - The Zacks Consensus EPS estimate has seen a 0.15% increase over the last 30 days [5] Valuation Metrics - Nvidia has a Forward P/E ratio of 40.48, which is lower than the industry average of 44.94 [6] - The company has a PEG ratio of 1.23, significantly lower than the average PEG ratio of 5.48 for the Semiconductor - General industry [6] Industry Context - The Semiconductor - General industry is ranked 164 in the Zacks Industry Rank, placing it in the bottom 34% of over 250 industries [7] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Group 1: Private Credit Market Concerns - The head of the IMF, Kristalina Georgieva, expressed concern over the growth of private credit lenders, which now account for more than half of financing [1][48] - Recent collapses of heavily indebted firms, such as subprime auto lender Tricolor and auto parts maker First Brands, have raised alarms about lending standards in the $3 trillion private credit sector [2][3] - Jamie Dimon, CEO of JP Morgan, highlighted the presence of "cockroaches" in the debt markets, indicating underlying issues within the private credit industry [5][49] Group 2: Economic Indicators and Banking Sector Performance - Zions Bancorporation announced a write-off of $50 million on two loans, while Western Alliance is pursuing legal action over a $100 million bad loan, contributing to fears of hidden credit stress [4] - US banking stocks have seen significant declines, with Zions shares falling over 10% and Western Alliance dropping more than 9% [3] - The SPDR S&P Regional Banking ETF, which tracks regional banking shares, decreased by more than 4% amid these concerns [3] Group 3: Broader Economic Context - The UK's GDP grew by only 0.1% in August, indicating a mild recovery from a previous contraction, but overall growth remains sluggish [7][18] - The US budget deficit narrowed slightly to $1.8 trillion, despite increased spending on health and public debt interest [8][9] - Wall Street's main indexes experienced declines, particularly in financial stocks, as concerns over the banking sector weighed on investor sentiment [10][11]

Core Insights - AMD will supply high-performance graphics chips to OpenAI as part of a collaboration to build AI infrastructure [1] - The agreement includes the provision of 6 gigawatts of computing power for OpenAI's next-generation AI infrastructure, with the first gigawatt expected to be operational in the second half of next year [1] - AMD has issued a warrant to OpenAI allowing the purchase of up to 160 million shares, representing about 10% of AMD's common stock, with vesting tied to computing power milestones [2] - This partnership is seen as a significant boost for AMD, which has been overshadowed by Nvidia's success in the AI chip market [2]

Company Performance - Nvidia's stock closed at $162.83, reflecting a daily increase of 1.77%, outperforming the S&P 500's gain of 0.61% [1] - Over the last month, Nvidia's shares have risen by 11.14%, exceeding the Computer and Technology sector's gain of 5.6% and the S&P 500's gain of 3.85% [1] Upcoming Earnings - Nvidia is set to release its earnings report on August 27, 2025, with an expected EPS of $0.99, indicating a growth of 45.59% year-over-year [2] - Revenue is forecasted to be $45.69 billion, representing a 52.1% increase compared to the same quarter last year [2] Fiscal Year Projections - For the entire fiscal year, earnings are projected at $4.24 per share and revenue at $197.54 billion, reflecting increases of 41.81% and 51.37% respectively from the previous year [3] Analyst Estimates and Stock Price Correlation - Changes in analyst estimates are correlated with near-term stock prices, with positive revisions indicating optimism about Nvidia's business outlook [4][3] Zacks Rank and Valuation - Nvidia currently holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate having increased by 0.15% over the past month [5] - The Forward P/E ratio for Nvidia is 37.72, which is a discount compared to the industry average of 39.04 [5] PEG Ratio and Industry Comparison - Nvidia has a PEG ratio of 1.34, significantly lower than the average PEG ratio of 2.74 for the Semiconductor - General industry [6] - The Semiconductor - General industry is ranked in the top 37% of all industries according to the Zacks Industry Rank [6][7]

Core Viewpoint - Nvidia is anticipated to report a year-over-year increase in earnings and revenues for the quarter ended April 2025, with the actual results being a significant factor influencing its near-term stock price [1][2]. Earnings Expectations - The consensus estimate for Nvidia's quarterly earnings is $0.87 per share, reflecting a year-over-year increase of 42.6%. Revenues are projected to be $42.71 billion, which is a 64% increase from the same quarter last year [3]. Estimate Revisions - Over the past 30 days, the consensus EPS estimate has been revised down by 0.93%, indicating a reassessment by analysts regarding Nvidia's earnings prospects [4][10]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate for Nvidia is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -5.24%. This suggests a bearish outlook from analysts [10][11]. Historical Performance - Nvidia has consistently beaten consensus EPS estimates in the last four quarters, with a notable surprise of +5.95% in the most recent quarter where actual earnings were $0.89 per share compared to an expected $0.84 [12][13]. Investment Considerations - Despite the historical performance, Nvidia does not currently appear to be a strong candidate for an earnings beat, and investors should consider other factors before making investment decisions [14][16].

Core Viewpoint - Nvidia is well-positioned to continue its earnings-beat streak in the upcoming report, having consistently surpassed earnings estimates in recent quarters [1][5]. Earnings Performance - For the last reported quarter, Nvidia achieved earnings of $0.89 per share, exceeding the Zacks Consensus Estimate of $0.84 per share, resulting in a surprise of 5.95% [2]. - In the previous quarter, Nvidia was expected to post earnings of $0.75 per share but delivered $0.81 per share, achieving a surprise of 8% [2]. Earnings Estimates and Predictions - There has been a favorable change in earnings estimates for Nvidia, with a positive Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [5][8]. - The current Earnings ESP for Nvidia is +3.87%, suggesting analysts are optimistic about its near-term earnings potential [8]. Zacks Rank and Success Rate - Nvidia holds a Zacks Rank of 3 (Hold), which, when combined with a positive Earnings ESP, indicates a high probability of beating earnings estimates, with a success rate of nearly 70% for stocks with this combination [6][8].

Core Insights - Nvidia shares surged 18.7% to close at $114.33, reversing an 11.5% loss over the past month, supported by high trading volume [1][2] Company Performance - Nvidia is projected to report quarterly earnings of $0.93 per share, reflecting a year-over-year increase of 52.5%, with revenues expected to reach $43.22 billion, up 65.9% from the previous year [3] - The consensus EPS estimate for Nvidia has been slightly revised higher in the last 30 days, indicating a positive trend that typically correlates with stock price appreciation [5] Market Context - The recent upswing in Nvidia's stock price is attributed to a broader market rally following President Trump's announcement to pause reciprocal tariffs for 90 days, while a baseline tariff of 10% on imports remains [2] - Reports indicating that Nvidia's H20 AI chips are exempt from US export controls have also contributed to the stock's price increase [2] Industry Comparison - Nvidia is part of the Zacks Semiconductor - General industry, where Intel shares also rose by 18.8% to $21.53, although Intel has seen a -8.3% return over the past month [5] - Intel's consensus EPS estimate has remained unchanged at $0, representing a -100% change from the previous year, and it currently holds a Zacks Rank of 3 (Hold) [6]

Market Overview - Three of the four major market indexes finished higher, with the Dow down -188 points (-0.43%), while the S&P 500 and Nasdaq rose +0.014% and +0.26% respectively. The Russell 2000 increased by +0.22% [1] - All four indexes are down over the past five trading days, with declines ranging from -2% to -3.8% [1] Economic Indicators - New Home Sales for January fell to 657K, a -10.5% drop month over month, below the estimate of 671K and the previous month's 738K. This is the lowest level since October's 12-month low of 623K, attributed to +7% mortgage rates due to high interest rates [3] Company Earnings Reports - NVIDIA (NVDA) reported Q4 earnings of 89 cents per share, beating estimates by 5 cents, with quarterly sales of $39.3 billion surpassing expectations of $37.72 billion, marking a +70% year-over-year increase. The company raised guidance for the current quarter [4][5] - Salesforce (CRM) posted revenues of $10.0 billion, slightly missing the Zacks consensus of $10.02 billion. Next-quarter guidance was light, leading to a -5% drop in shares [6] - eBay (EBAY) exceeded expectations with Q4 earnings of $1.25 per share, beating estimates by 5 cents. Gross Merchandise Volume (GMV) was $19.3 billion, but forward guidance was light, resulting in an -8% decline in shares [7] - C3.ai (AI) also beat estimates, reducing its quarterly loss per share to -12 cents, with revenues of $98.8 million, outperforming expectations of $97.97 million. However, shares fell -3% in late trading [8]