Nvidia Earnings: Pivotal Moment for the AI Stock Boom

• By Staff Editor
• Aug 24 2024

The AI Obsession
The artificial intelligence revolution has captured the world's imagination and investors' dollars. But for the raging bull market in AI stocks to sustain its trajectory, one company's earnings report next week could prove pivotal - Nvidia.

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Chip King's Dominance
The chip maker has become the de facto leader and prime beneficiary of the AI boom so far. With a market cap over $1 trillion, Nvidia has seen its stock soar nearly 2,900% over the past five years on insatiable demand for its high-powered graphics processors. Nvidia enjoys dominance in the crucial data center GPU market, with an eye-popping 92% share.

Sky-High Expectations
This market leadership has set astronomically high expectations for Nvidia's earnings, due out after the bell on Wednesday. Analysts forecast the company's revenue surged 112% in the latest quarter compared to a year ago. Yet some on Wall Street believe even that could prove conservative. Analysts at Jefferies predicted Nvidia will "smash" expectations by $1 billion or more.

AI Trade Catalyst
If Nvidia delivers a "shock and awe" report as Wedbush's Dan Ives expects, it could reignite momentum for the AI semiconductor trade that has stalled amid signs of moderating cloud spend. "Nvidia is the heart and lungs of this bullish tech trade as the AI Revolution takes hold," said Ives.

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Bellwether for Mega-Caps
Bernstein's Mark Shmulik calls Nvidia "a bellwether of the Magnificent Seven and AI trade," referring to the top cloud heavyweights. Any weakness could spur further rotation out of those leaders.

The Next Frontier: AI Data Centers
While expectations are high, the long-term opportunity driving Nvidia may be even more monumental - the multi-trillion dollar buildout of hyperscale data centers to power the next wave of AI.

Data Deluge Driving Demand
As transformational as large language models have been, the real heavy lifting in AI will require massively scaling data capabilities. Annual global data creation will increase over 50% in just months as AI apps proliferate.

Nvidia's Data Center Pivot
The tech titans are embarking on a generational buildout of "mega data centers" with radically more capacity. Nvidia has positioned itself at the center, cultivating under-the-radar suppliers contributing cutting-edge networking hardware, chip designs, software and more.

Under-the-Radar Upside
While little known today, these emerging AI data center leaders could graduate to household names, powering Nvidia's pivot from a semiconductor play to an entire AI infrastructure juggernaut.

A Pivotal Catalyst
For investors, Nvidia's earnings represent both a crucial near-term catalyst and a potential validator of the colossal AI infrastructure opportunity still taking shape. Buckle up for a pivotal data point in this generational growth story.

YOU NEED TO WATCH THIS BEFORE NVIDIA EARNINGS

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