NVIDIA is expected to have its first quarter (Q1) cash effects on May 25, 2022, after the market close. At the time of this writing, his first quarter earnings expectations consistent with constant percentage (EPS) were $1. 29, up 40. 2% from a year ago. year-on-year (YoY). Revenue is also expected to rise to $8. 1 billion, up 43. 4% from a year ago.
For the next earnings release, much will continue to rely on its two main business segments, gaming and knowledge media, to be delivered. it bodes well for Nvidia in highlighting the continued tailwind of enterprises’ virtual shift to synthetic intelligence (AI) and high-performance computing. While the expansion of the revenue source can be expected to decline further annually compared to the initial increase of -19, an expected accumulation of 43. 4% still indicates a rate of expansion higher than the trend over the past five years. Going forward, the untapped mass market for customer upgrades to new versions of their GTX series graphics cards may also continue to be a catalyst to claim in the coming months.
That said, a key threat to watch out for may be the drop in crypto costs from April to May, which can be a potential headwind for your gaming segment. This takes into account the fact that mining demand tends to fade. with cryptocurrency costs falling, translating into lower demand for sales of Nvidia’s cryptocurrency mining processors (CMPs). Bitcoin and Ether are currently trading around 36% and 45% from the start of the year at the time of writing.
Nvidia’s profit margin before interest, taxes, depreciation and amortization (EBITDA) has remained resilient so far, and the technological merit of its product allows it to pass on emerging costs to consumers through superior average promotion costs (ASP). A domain of uncertainty is the potential mitigation of global chip shortages, which may make an additional buildup in ASP unsustainable. The GPU shortage may only reach or even exceed its peak. If this is true, it may result in some moderation in product costs compared to its previous increase induced by the Covid-19 pandemic. This will put its margins under close scrutiny in the coming months.
The continued rise in interest rates has focused on the valuation of stocks, especially for expansion names like Nvidia, whose maximum valuation leads to greater sensitivity to the movement of U. S. Treasury yields. UU. La recent sell-off has led to a revaluation of Nvidia’s projected value -a-earnings (P/E) to its pre-Covid-19 grades of 30. 3, the lowest since May 2020. While its valuation would possibly outperform its industry peers, one thing about granting the premium is because it is above average expansion. Its former five-year EPS expansion is 52. 8%, well above the semiconductor industry average of 15. 9%. of a further revaluation of the percentage value closest to the industry average.
Currently, the inventory has 40 “buy” recommendations, nine “takes” and one “sell”. Bloomberg’s 12-month consensus target value of $323. 95 suggests a possible accumulation of 87. 6% of the existing value of $172. 64.
On the four-hour chart, a bullish divergence in the relative strength index (RSI) and Moving Average Convergence Divergence (MACD) signs may increase the chances of a short-term recovery, following the strong sell-off of just around 45% since early April. This is accompanied by a bullish candle on last week’s chart. That said, the long-term outlook will remain fragile, with ongoing policy tightening expected to slow economic expansion momentum, raising questions about the sustainability of a rebound. The long-term downward trend in Nvidia’s percentage value remains intact, with the series of decreasing ups and downs published since November last year. A look at the undeniable 100- and 200-day moving averages (MAs) also revealed a bearish crossover, marking its first time since 2019.
Short-term relief can potentially lead to a new control of the $206. 00 point, where a past point will now serve as resistance to overcome. The short term may be only at $156. 30, where downward buying was noted towards the end of last week.
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