As NVIDIA Corp (NVDA) prepares to report its earnings on Wednesday, investors and analysts are eagerly awaiting results that could justify the company’s skyrocketing valuation.
Jim Cramer, the host of CNBC’s ‘Mad Money,’ predicts a strong showing, suggesting the market is looking for a significant upside surprise from the AI chipmaker. He expects Nvidia to report a $2 billion upside surprise in the current quarter, and another $2 billion lift for the next quarter.
Cramer emphasizes the importance of recognizing Nvidia’s long-term potential and its crucial role in the rapidly evolving artificial intelligence sector. Despite recent market volatility that saw Nvidia’s stock dip considerably, Cramer maintains that the company’s long-term prospects remain robust.
Drawing an intriguing comparison, Cramer likens Nvidia to a biotech company, stating, “Nvidia is, in some ways more of a biotech which has developed something that each year saves more people’s lives.” This analogy highlights the transformative potential of Nvidia’s AI technologies, implying they could have a profound impact on various industries and even save lives.
Cramer also sheds light on an often overlooked aspect of Nvidia’s business: its software capabilities. He argues that while Nvidia is often perceived as a hardware company, its software business is a significant driver of its value, contributing to its high valuation.
With the market bracing for Nvidia’s earnings report, Cramer advises investors to look beyond short-term fluctuations and focus on the company’s long-term growth trajectory.
Nvidia’s upcoming earnings report is highly anticipated, with analysts expecting second-quarter revenue of $28.46 billion, a substantial increase from $13.51 billion in the same quarter last year. Earnings per share are projected to be 64 cents, up from 27 cents per share in the previous year.
Despite recent volatility, some experts remain optimistic about Nvidia’s future. Eric Jackson, founder of EMJ Capital, believes Nvidia’s stock could surge to $340 in the medium term, fueled by substantial investments in AI data centers. Dan Ives of Wedbush Securities echoes this sentiment, predicting that Nvidia will deliver “another masterpiece quarter” due to the high demand for AI.
Nvidia’s stock closed at $129.37 on Friday, an increase of 4.55% for the day. Year to date, the stock has surged by 168.57%.
As the market awaits Nvidia’s earnings report, investors will be closely watching to see if the company can live up to the high expectations and further solidify its position as a leader in the AI revolution.
