All eyes are on the chipmaker as it gears up to release its second quarter earnings.
Transcript:
CAROLINE WOODS: What about earnings as a potential catalyst? Because we do still have Nvidia.
KEVIN MAHN: Earnings have been good in the second quarter. About 81% of companies beat on earnings and revenue. I believe we have a year-over-year earnings growth rate now nearly 12%. That would mark the third consecutive quarter of double-digit earnings growth. And then we have the big kahuna coming in this Wednesday after the close — that being Nvidia.
And Nvidia does move markets, because all investors know the name. It’s associated as being the hub of the AI ecosystem. And technology is the most-held sector by retail investors. I think they’re going to knock the cover off the ball once again. Earnings expectations are around $1.01 a share — I believe they’ll exceed that, exceed revenue expectations.
What I’m really interested in seeing, Caroline, is what their data center revenue is. Last quarter it accounted for 88% of their revenues; just 12% came from the chips. Are data centers going to continue to lead the way, or are chips going to pick up the pace again? So we’ll know by Wednesday afternoon. But I expect that to be a tailwind for the markets.
CAROLINE WOODS: But it’s already up 35% year to date. How much higher can it go?
KEVIN MAHN: Right, but you could have said that last year or even two years ago. And I still believe we’re at the beginning stages of the AI revolution right now. As more and more CapEx starts to take place into the AI infrastructure buildout, Nvidia is going to benefit. Taiwan Semiconductor is going to benefit. ASML is going to benefit. All the ancillary providers that make Nvidia who they are also stand to benefit.
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