Insights on Nvidia's Stock: Speculation, Split Expectations, and Market Sentiments
Written by Santiago Quintero
Recent Stock News
Nvidia (NVDA) is set to release its fourth-quarter (Q4) earnings tomorrow, February 21, in one of the most highly anticipated days in recent stock market history. Over the last year, the technology manufacturer’s stock, which has beaten out its main competitors, Intel and AMD, has risen by roughly $483, currently being valued at $690. On average, one can expect to see a general trend of stocks increasing roughly 10% in good years, however, this increase is over 234%. This ridiculously high price has been caused by many factors, including increased AI presence and surprisingly high financial reports. Nevertheless, there is a lot of concern regarding the stock’s future.
Financial Overview of NVDA
NVDA has been a rollercoaster for the last few months, often fluctuating over $10 on any given day. Nonetheless, today it experienced the largest decrease this year, dropping approximately $33 (4.5% decrease) and closing at roughly $694. This is because there is a lot of speculation that Nvidia will produce an underwhelming financial statement, as the estimations are relatively high.
In their previous earnings call, reported on November 21, 2023, their EPS (Earnings per Share) and revenue surprised the market by 18.73% and 12.47% respectively, reporting $4.02 EPS and $18.12 billion in revenue. However, current estimates predict an increase to $4.64 EPS and $20.55 billion, a substantial increase that would cement its spot as one of the largest companies by market cap.
Investor Sentiment
Many investors have decided to sell their shares today and keep the profits, while fewer have decided to trust Nvidia to exceed market expectations. Because of this, the overall demand for the stock has dropped today, generating a price drop.
However, some investors are looking into the long run and deciding to invest today for reasons besides tomorrow’s earnings call. Rumors of a stock split have been circulating the market since the end of 2023, as the price of the stock continues to rise. Due to the high demand for the stock, Nvidia’s stock price has become unaffordable for many investors. However, a stock split would solve this by distributing more shares. These splits often have positive effects on a company’s share price, as they generate more demand through greater accessibility.
Furthermore, according to Yahoo Finance, NVDA currently estimates the stock price as “Near Fair Value,” predicting a 35% estimated return. The stock’s performance outlook is also optimistic, predicting an increase in the mid-term and long-term, anywhere from 6 weeks onwards.
Concluding Thoughts
With so many factors contributing to Nvidia’s share price, there is no real way to tell what will happen tomorrow. Some companies, like Walmart and Disney, have announced large acquisitions in the billions of dollars on the days of their earnings calls, which could also play a role. With millions of eyes looking at the stock, the earnings call is sure to create a pivotal trading day for the industry.
Santiago Quintero is a student interested in finance from Broward County. Outside of school, you can find him hooping with his friends or listening to Latin hip-hop music.
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