NVIDIA Earnings amid soaring interest rate hike expectations.

NVIDIA inc. (NVDA) is a multinational company based in  Delaware and also in Santa Clara, California with a market capitalization of 423.13B USD. NVIDIA specialises as worldwide leader in creating visual computing technologies and invented the highly successful Graphic Processing Unit (GPU). The company has been selling graphics cards used in high-end personal computers and gaming consoles for more than 20 years now.

NVIDIA is expected to report FY23 Q1 earnings on 25/05/2022 right after the market closes, amid an environment of rising inflation which has led to an increase in US interest rates. According to Yahoo Finance Research, based on 31 analysts’ forecasts, the consensus EPS forecast for the quarter is $1.30. Revenue estimates based on a survey of 32 analysts by Yahoo Finance is expected to be 8.12 billion.

NVIDIA earnings per share for the last five years has been nothing but impressive because the share has returned 385%, beating the S&P 500 with a return of 83%.

Source: www.tipranks.com/stocks/NVDA/forecast

 But in 2022 the stock’s price has been in a downward trajectory having shed nearly 45% while the S&P 500 has declined by roughly 18% and therefore the NVIDIA stock has significantly cooled off. It appears that a hawkish federal reserve has largely contributed to this sell off which has been evident in high-tech growth stocks and Investors are quite aware that this fact will limit the company’s ability to access cheap debt.

Source: Source: www.tipranks.com/stocks/NVDA/forecast

Also the fact that there has been a drop in demand for graphics cards by cryptocurrency miners has had an impact on the share price given the fact that digital currency miners accounted for a quarter of Graphics Processing Unit sales in the first half of 2021. However, NVDA’s fast growing data center business is still holding up and investors can look to the chipmaker’s stock increased investment in the automotive sector. Hyundai, Mercedes, Tata motors, Jaguar and Land rover, BYD, Navistar and Volvo are among the automotive companies it has partnered with for its full stack for autonomous driving platform.

TipRanks have  a 12-month price targets for NVIDIA in the last 3 months see the average price target at $308.26 with a high forecast of $410.00 and a low forecast of $190. The average price target represents a 82.42% change from the last price of $168.98Overall, the stock has a strong Buy consensus rating based on 21 Buys, 6 Holds and 0 Sell.

NVIDIA price action in the 52-week range has been between $154.6-346.47. According to price action on the daily timeframe the 21-day moving average sits at $182.00 and the 50-day is at $217.00. Next support is the psychological $160.00 level, the 52-week low at $154.60 and then $150.00.

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Dennis Mwenga

Market Analyst – HF Educational Office – Kenya

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