Nvidia Earnings: What to Expect and How to Trade
High Expectations for Nvidia
Nvidia (NASDAQ: NVDA) is scheduled to report its second-quarter earnings on Wednesday after the closing bell. Expectations are high for the chipmaker, which is the best-performing stock in the entire S&P 500 Index this year.
Wall Street witnessed Nvidia's resilience during the equities rout earlier this month and the subsequent rebound in which the SP 500 Index recovered 4%. Analysts are expecting Nvidia to report strong earnings and revenue growth, driven by demand for its gaming chips and data center products.
Market Value Swing
Goldman Sachs notes that options pricing data suggests that Nvidia's stock could see a 298 billion swing in market value after its second-quarter earnings report.
Key Metrics to Watch
Here are some key metrics to watch when Nvidia reports earnings:
- Revenue growth
- Earnings per share (EPS)
- Gross margin
- Operating margin
- Cash flow from operations
- Guidance for the next quarter and full year
How to Trade Nvidia Stock
If Nvidia reports strong earnings, its stock could rally. However, if the company disappoints, its stock could sell off. Traders should consider the following factors when trading Nvidia stock:
- The overall market sentiment
- The performance of other chipmakers
- The technical analysis of Nvidia's stock chart
Traders should also be aware of the risks associated with trading Nvidia stock. The company's stock is volatile, and it could experience large swings in price. Traders should only trade Nvidia stock with capital that they can afford to lose.
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