The semiconductor industry is on edge as investors eagerly await Nvidia Corp’s (NVDA) highly anticipated second-quarter earnings report, due after the market closes on Wednesday. The results could have a significant ripple effect across the sector, potentially influencing market sentiment and driving stock movements.
Analysts are predicting strong earnings from Nvidia, with forecasts pointing to earnings of 64 cents per share on revenue of $28.68 billion, a substantial increase from the previous year. Nvidia’s stock, which has already seen a remarkable 165% surge year-to-date, could see further gains if the results exceed expectations and the company provides a positive outlook for artificial intelligence (AI) accelerators.
In the meantime, Intel Corp (INTC) shares have been struggling, closing Tuesday’s session near flat and down 5% over the past week. This decline comes on the heels of Intel’s own disappointing second-quarter financial results, reported in July. The company reported earnings of 2 cents per share, missing the expected 10 cents, and revenue of $12.83 billion, slightly below estimates and down 0.9% year-over-year.
Following these results, Intel announced a $10-billion cost reduction plan aimed at cutting spending and headcount by over 15% by the end of 2024. The company also announced the suspension of its dividend starting in the fourth quarter of 2024.
CEO Pat Gelsinger acknowledged the challenging outlook but highlighted steps to improve efficiency and market position. For the third quarter, Intel expects a loss of 3 cents per share with revenue between $12.5 billion and $13.5 billion.
The market’s focus will undoubtedly be on Nvidia’s report, with the potential to significantly impact the overall semiconductor sector. If Nvidia delivers strong results and a positive AI outlook, it could provide a much-needed boost to the industry and potentially lift Intel’s shares as well. Conversely, disappointing results could further dampen sentiment in the sector and exacerbate the challenges Intel is facing.
