Is Nvidia (NVDA) Blackwell Delay A Concern For Its Earnings?
The $Philadelphia Semiconductor Index(SOX)$ and $NVIDIA Corp(NVDA)$ dropped more than 2% on Monday (26 Aug) pushing them down more than 10% from record highs reached in July 2024.
Interest Rate Cuts and China Weak Economy
We have been seeing rallies becoming overheated, the sector has been hit by concerns over the Fed interest rate cuts decision and also China’s weak economy.
We have $SUPER MICRO COMPUTER INC(SMCI)$ fell by more than 8% by the end of trading on Monday (26 Aug) as the company remains on track for a 10-for-1 stock split, beginning on 01 Oct. What investors might be concerned is they need more confidence from Super Micro over the next two fiscal quarters before a more sustained bullish reversal can be expected.
Note that SMCI stock price have dropped 36% over the past six months after hitting an all-time high of $1,088 in mid-March. Despite the recent plunge, the stock is still up 112% year to date.
From the multi-timeframe, SMCI looks like we can expect some downward trend despite Nvidia earnings turned out strong.
Nvidia Next-Gen AI Chips Delay Might Be A Concern
We have seen Nvidia with a $3.1 trillion market cap beat the bottom line in six previous quarter earnings, but the news headlines coming out during the weekend of 03 August showed that there were reports of delay in the Nvidia’s next -generation AI chips.
Blackwell semiconductors were originally expected to be available this coming January, but concerns rose that they might not be ready until the following spring. But we are also seeing that the demand for its current chips was reportedly strong.
Nvidia stock price has dropped from 10 July high above $135 to near $90 on 05 August. We have been seeing Nvidia trying to make a comeback on its stock price to above $130,but failed to cleat $131.
If we looked at the multi-time frame, I would think that NVDA could provide us a surprise for its earnings. I am expecting NVDA to jump at least 5% post earnings.
Summary
Powell’s speech reaffirmed expectations for the start of Fed easing. With the minutes from the July FOMC gathering already out in the open, the bond market largely anticipated Powell’s tone and broad guidance. Equities, particularly small caps, rallied, nevertheless. While much could depend on how PCE inflation verifies later this week and what the August employment report reveals, attention can be turned back to company-specific news this week such as NVIDIA (NVDA).
Appreciate if you could share your thoughts in the comment section whether you think we should look beyond NVDA latest chip delay and look at the strong demand for its current chips.
@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.
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