With Nvidia’s revenue preview, what can we expect after AMD?

  • Nvidia shares are trading higher ahead of Wednesday’s earnings.
  • NVDA stock is also likely to benefit from a reduction in geopolitical tensions.
  • Nvidia stock seeks to regain bullish momentum despite 2022 struggle

Nvidia shares have been the best performers for holders in 2021, but 2022 hasn’t been so kind so far. This trend is not specific to equities as the macroeconomic backdrop has changed dramatically in just a few months. We’ve gone from forecasting three Fed rate hikes at the start of the year to now forecasting fed funds futures for up to seven hikes and a virtual certainty of a 50 bp rate hike baseline at the March meeting.

We’re still not sure the Fed will get off to such a dramatic start, but markets have certainly priced risk assets up accordingly. Geopolitical tensions between Russia and the West over Ukraine have also heightened investors’ risk aversion.

Nvidia Stock News

The long-standing deal for British chipmaker Arm is finally on the table. The news had been rumored for some time but was confirmed last week. This saw Nvidia shares post a modest reaction as rumors had been circulating for some time.

Nvidia has been under pressure due to news of this potential failure as well as the macro environment. Nvidia is down 17% year-to-date, so investors are hoping earnings tomorrow can turn the tide. Nvidia is expected to post earnings per share of $1.22 on revenue of $7.42 billion. We have to go back to 2018 for the last time Nvidia missed earnings estimates. As this earnings season shows us, it is the statements of direction and outlook that have the most impact on stock prices.

Nvidia must pay SoftBank (owner of Arm) for the proposed acquisition and has already said it will take a charge of $1.36 billion in the first quarter of 2023. Nvidia can keep its 20-year licensing agreement with Arm. CitiBank decided to reiterate its buy rating on Nvidia after confirmation of the failure of the Arm deal. The broker said it put a price target of $350 on Nvidia.

A strong earnings report from AMD last week didn’t prevent the stock from taking a big hit on Friday as investors fled technology and growth and turned to safe-haven assets.

Nvidia stock predictions

The trend here is easily identifiable and the 200-day moving average sits at $227. The 2022 yearly lows at $208 would then be next. Resistance is at $267.

Nvidia (NVDA) Chart, Daily

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Karen J. Nelson