Nvidia stock has been swinging wildly due to the downturn in the tech market, and the reported acquisition of the company by chip designer Arm. Now, Nvidia is scheduled to release its fourth-quarter results on February 16.
It is well known that Nvidia manufactures one of the best and most popular graphics cards on the market. The US-based company is optimistic about the future and believes it is in a good position to meet demand. It is positive for the technology area that a company like Nvidia is positive about the chip shortage, and believes that it will soon be over.
Nvidia is known for its strength in its data center business thanks to the growing adoption of cloud-based solutions. Thanks to the pandemic-induced growth of such services in recent times due to teleworking issues, Nvidia’s revenues are likely to have been boosted.
The company is targeting a 4% quarter-over-quarter increase in sales. Nvidia expects revenue of $7.4 billion. The Zacks Consensus estimates earnings of $7.43 billion for Nvidia, up to 48.5% year-over-year. The company’s earnings beat the Zacks Consensus estimate in the previous four quarters, with an average surprise of 7.7%.
What investors are expecting from the soon-to-be-released results are several specifics. According to Atif Malik, an analyst at Citigroup, they are going to focus on the growth of its data center segment, upgrades to its network supply constraints, and gaming demand in 2022.
Malik also stated data centers could help drive growth, while being driven by a new product launch and expansion of artificial intelligence and machine learning solutions.
It should be emphasized that Nvidia stock had a difficult start to the year, with a loss of around 17%. It also went through problems related to its proposed acquisition of chip designer Arm from SoftBank for $40 billion. There were some regulatory hurdles with the Federal Trade Commission and it was all there. Putting an end to that deal may have been the best thing for Nvidia stock and the company in general.
Some Bank of America analysts wrote in a note, “it could be a net positive for NVDA in some scenarios (…) NVDA does not need to own Arm to use Arm technology to expand in the data center.” Nvidia likely saved itself a few problems, as it would have had to deal with an internal dispute between Arm and its Chinese branch, Arm China.
On Friday, Nvidia stock was down 5.5%; however, it is expected that the release of its results will be positive and attract more shareholders.
Do you think it is a good idea to invest in Nvidia stock? What are you most interested in seeing in the results to be released on February 16?
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