Earnings preview: NVDA stock trades near all-time high. Beware of sell-the-fact

What time are NVDA earnings: Wednesday, 23rd August a 16:20 ET — 20 minutes after the bell, thought that time may not be exact.

Nvidia (NVDA) is about to unveil its quarterly earnings, and the anticipation is insane. I can’t remember an earnings report that was this anticipated. The options market implies a 10.4% move in either direction for one of the most-valued companies in the world (market cap $1.15 trillion).

I don’t think the ‘consensus’ numbers really matter because this is such a momentum stock. It’s the backbone of the AI-inspired rally in the Nasdaq this year and undoubtedly the ‘general’ of the bullish army.

In terms of the consensus, I full expect it to be beaten. The demand for Nvidia chips is unprecedented and they can name their price as the datacentre battle heats up. What I suspect will happen is an initial pop on the headlines by around 10%, followed by profit-taking a selling of the fact as options traders quickly take profits.

Anyway here are the numbers for Q2 ’23:

• Expected EPS: $2.09
  Projected
• Revenue: $11.224B

Breaking down that revenue:

• DataCenter: $7.691B
• Gaming: $2.4B
• Automotive: $317M
• Professional visualisation: $318M
• OEM and IP: $101M

To emphasize the likelihood of beating, the broader tech sector has seen a whopping 93% of earnings surpassing estimates and 94% of semis beating the odds.

NVDA’s year-to-date performance? An impressive 227% surge, partly buoyed by their AI initiatives, including 8.5% on Monday as earnings buyers piled in (will those be sellers tomorrow?)

What worries me further is that analysts have been fuelling the fire with numerous upgrades in the past two weeks. Everyone remebers remembers Q1 when Nvidia crushed it with substantial beats on both EPS, revenue and guidance. The latter of those is the big one heading into this report. You don’t buy something trading at 40x sales because of the current quarter, it’s all about guidance and even the slightest cautious note could derail the NVDA stock express.