The stock market seems unexcited about Nvidia’s upcoming earnings report, even though the stock was on track to end a seven-day losing streak on Tuesday. Some analysts think this lack of excitement could actually help the stock.
Nvidia shares rose 1.8% in Tuesday afternoon trading, which is a strong gain for a company worth over $5 trillion. However, this only made up for a small part of the losses from the past seven days, which was Nvidia’s longest losing streak in over four years.
Investors might be careful because of recent trends. Nvidia shares have dropped after each of the last several earnings reports, and the next report will come out after the market closes on Wednesday.
Still, some people on Wall Street are optimistic. On Monday, Cantor Fitzgerald repeated its positive view on Nvidia, saying the stock is being valued as if the company is losing out in the AI market, but they believe the opposite. The firm suggested that investors who believe in AI for the long term should think about buying more Nvidia shares. They also noted that not many investors currently hold the stock, so if momentum shifts, it could happen quickly.
Some investors worry that Nvidia could lose AI chip market share to competitors. Cantor Fitzgerald said that even if Nvidia’s share drops from about 80% to 60%, the company could still make over $1 trillion in data-center revenue by 2030. This means the stock is now trading at about eight times its expected profits by the end of the decade.
There is no promise that Wednesday’s earnings report will be a turning point for Nvidia’s stock. However, because expectations are low, it might be easier for the company to deliver a positive surprise.
