By Adam Clark
Nvidia rose on Wednesday, but the spectacular gains it achieved in 2023 and early this year are on hold. The chip maker is building up to its first-quarter earnings report and it will need to meet heightened expectations for its rally to resume.
Nvidia shares closed 3.6% on Wednesday, gaining along with the wider market after the latest consumer price index showed price rises slightly cooled down in April from earlier in the year.
The company will post its first-quarter results on May 22. Shares have drifted in a range of $850 to $950 since late March.
Just meeting expectations would likely send the stock down. That would match the pattern seen following recent reports from fellow chip companies such as Advanced Micro Devices and Arm Holdings.
Consensus expectations on Wall Street are for Nvidia to report revenue of $24.51 billion. But to avoid disappointing investors, KeyBanc analyst John Vinh said, the chip maker will likely need to report revenue of around $26 billion and give guidance for its second quarter of around $28.5 billion.
"Despite anticipation of next-generation Blackwell GPUs [graphics-processing units] in the second half, we see limited signs of a demand pause and expect Nvidia to report first-quarter results and second-quarter guidance meaningfully above expectations," wrote Vinh in a research note on Tuesday.
Vinh maintained an Overweight rating and price target of $1,200 on Nvidia stock.
Among other chip makers, Advanced Micro Devices was up 1.9%, while Intel was down 0.1% in early trading.
Nvidia shares have risen 84% so far this year through Tuesday's close. That compares with a 10% rise in the S&P 500 index and a 10% rise in the Nasdaq Composite over the same period.
The stock rise meant a significant boost in pay for Nvidia CEO Jensen Huang, whose total compensation for fiscal 2024 was $34.2 million, according to a filing that came out Tuesday afternoon. That's above the $21.4 million he received for fiscal 2023. His annual stock awards totaled $26.7 million, up from $19.7 million a year before.
That still left Huang's pay at notably less than the $62.3 million earned by Apple CEO Tim Cook in his latest annual compensation and the $48.5 million earned by Microsoft CEO Satya Nadella. Those are the only two companies with a larger market capitalization than Nvidia.
Write to Adam Clark at adam.clark@barrons.com
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(END) Dow Jones Newswires
May 15, 2024 18:09 ET (22:09 GMT)
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