Nvidia is at the center of a new meme stock rally. its publication quarterly results That subject will be tested next Wednesday. again.
Wedbush analyst Dan Ives, one of the most creative voices on Wall Street today, called Nvidia’s quarterly results from last May a “shocking” event, combining dramatic flair with pragmatic, unapologetic optimism about the AI investment case. .
Ives wrote at the time, “The market was eagerly awaiting Nvidia’s quarterly report and guidance last night to gauge the magnitude of this AI demand story, with many skeptics saying a bubble was forming and instead Jensen And the company offered guidance for this era.”
And Ives was just getting started.
According to Ives, in August, Nvidia’s revenue increase was a “putting the mic down” moment for the company.
By November, Nvidia CEO Jensen Huang was crowned by Ives as the “Godfather of AI” after the company once again raised sales forecasts. Ives said the company’s outlook in November was “the guidance heard around the world as the AI revolution accelerates into 2024 for the broader technology sector.”
After three months, what do we have in the stock market? Anything and everything that bets on AI attracts buyers, with Nvidia becoming the third-largest company in the market.
For example, on Wednesday night the chip giant disclosed modest stock investments in Arm Holdings, SoundHound AI and biotech company Recursion Pharmaceuticals.
Shares of all three surged on Thursday following the news, particularly SoundHound, which gained 60% on the news that Nvidia owned about 1.5% of the company’s outstanding shares as of Dec. 31.
Add to this the action seen in Arm shares last week and the week-long rally in Super Micro Computer’s cloud storage play, which has seen its shares rise nearly 200% in a month and nearly 1000% in the last 12 months. so we can see him There is a real craze for AI in the stock market, Where the mere suggestion that a company could benefit from accelerated spending on AI is enough to send shares soaring.
Now, as Ives noted in its May 2023 report, the idea that an AI-driven market rebound hangs by a thread that only Nvidia can tightly tie is far from a novel idea. So perhaps it’s our mistake to view next week’s results as anything too important beyond Nvidia’s fortunes.
Additionally, the outlook for corporate earnings that could support a rebound beyond AI continues to improve. Meanwhile, the number of times corporate executives mention AI on earnings calls has actually declined.
And unlike the meme stock rally of 2021, in which fundamental stories were carelessly constructed to explain why a stock could double or triple in a matter of a few trading days, The enthusiasm for AI investment is built on a strong foundation of real corporate spending.
But with the heart of that investment found in Nvidia’s earnings statement, it’s hard to shake the feeling that these results will mean something big for the stock market rally. Even if we have seen this film before.
written article originally in english By miles udland, Head of News at Yahoo Finance.
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