Why Shares Of NVIDIA Are Under Pressure Ahead Of The Earnings Report?
NVIDIA Video 24.02.21.
NVIDIA Stock Moves Lower Amid Broader Pressure On Tech Stocks
Shares of NVIDIA have declined from the $600 level to the $560 level in just three trading sessions ahead of the company’s earnings report. NVIDIA is set to provide its quarterly results today, after market close.
Analysts expect that NVIDIA will report revenue of $4.8 billion and earnings of $2.81 per share. NVIDIA has a history of beating earnings estimates so the market will likely demand a strong report.
The stock has recently found itself under pressure amid broader sell-off in the tech space which was triggered by the rapid increase in U.S. Treasury yields.
NVIDIA was among the main beneficiaries of the digital shift that happened during the pandemic, but rising yields have pushed some traders to take money out of high-flying tech stocks and put them into cyclical stocks.
What’s Next For NVIDIA?
Trading action has been mostly calm after the recent earnings report. This time, traders will likely focus on the company’s forecast for future growth. The stock is currently trading at forward P/E of more than 50 which indicates that the market expects strong growth from the company.
If these expectations are not met, shares of NVIDIA may find themselves under strong pressure. The previous year was very successful for the stock, and it is still trading near all-time highs despite the recent pullback so many traders will be ready to take some profits off the table in case of a disappointing earnings report.
At the same time, recent trading action indicated that the market was still ready to support high-flying tech stocks on pullback despite rising yields. The appetite for risk remains high, so a strong report could easily push NVIDIA shares to all-time high levels which are located near the $615 level.
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This article was originally posted on FX Empire
