© Reuters. FILE PHOTO: A view of a Nvidia logo at their headquarters in Taipei, Taiwan May 31, 2023. REUTERS/Ann Wang/File Photo
By Medha Singh
(Reuters) -Nvidia shares hit an all-time high on Tuesday in a buildup in expectations over the quarterly results of the chip designer that has been the biggest beneficiary of a boom in artificial intelligence.
Rising bets that Nvidia (NASDAQ:)’s revenue target will once again surpass Wall Street estimates have lifted the stock about 19% from a two-month low hit last week.
Shares were last up 0.4% at $471.55 after hitting a record high of $481.87 minutes after the market opened and crossing its previous peak of $480.88 on July 14.
Analysts expects Nvidia, which dominates the market for chips used to power generative AI like ChatGPT and many such services, to forecast 110% growth in third-quarter revenue to $12.50 billion when it reports results on Wednesday.
“It might be the most important report of this earnings season. We want to hear that they can build on the amazing quarter they had last quarter,” said Dennis Dick, market structure analyst at Triple D Trading.
The company had in May forecast second-quarter revenue that was more than 50% above expectations. That pushed its market capitalization above $1 trillion, making its stock the best performer on the .
Nvidia’s blowout forecast last quarter had also sparked a rally in AI-stocks as well as Big Tech, making it one of the key drivers for the U.S. stocks rally this year.
“To keep the stock price where it is, we would want to see bottom line start to support those share gains,” said Brian Mulberry, client portfolio manager at Zacks Investment Management, which holds Nvidia shares.
At least 19 brokerages have this month raised their target price on Nvidia, pushing the median view to $500, which is a 6.5% increase to stock’s last closing price. Nvidia shares have more than tripled in value so far this year.
Nvidia saw the highest increase in popularity among hedge funds in the second quarter, a report from Goldman Sachs showed on Monday.
“Nvidia (and) AI story is what is driving the market right now. If Nvidia were to miss (expectations), this market would be in a world of pain,” Dick said.
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