Will 'Cheonvidia (NVIDIA stock at $1000)' be reached this time? NVIDIA, the leading AI (artificial intelligence) stock, hit an all-time high at the closing price on the 21st (local time), a day before its earnings announcement. If strong earnings are confirmed again, as they were a year ago when the NVIDIA-driven AI rally began in earnest, there is growing anticipation that it will signal a summer rally across the New York stock market.
Focus on NVIDIA Earnings Early Tomorrow
On that day, NVIDIA's stock price in the New York stock market closed at $953.86, up 0.64% from the previous session, buoyed by expectations for the earnings to be released the next day. This surpassed the previous all-time closing high of $950.02 recorded on March 25, breaking the record in about two months. If this trend continues, reaching 'Cheonvidia,' meaning NVIDIA stock at $1000, is not far off. Stifel, Barclays, and Baird have all raised their target prices for NVIDIA to $1085, $1100, and $1200 respectively the day before. The average target price of major Wall Street investment firms compiled by Yahoo Finance is $1035.
According to Bloomberg data aggregating Wall Street forecasts, NVIDIA's adjusted earnings per share (EPS) for the first quarter of the fiscal year (February to April), to be released after the close of the New York stock market on the 22nd, is estimated to increase by more than 400% from $1.09 last year to $5.65. Quarterly revenue is also expected to grow 243% year-over-year, from $7.19 billion last year to $24.69 billion this year. Observers expect NVIDIA's strong performance to continue, driven by surging demand for AI chips. Evercore ISI predicted in an investor memo that "NVIDIA is likely to exceed Wall Street expectations."
There is also analysis that NVIDIA's market capitalization of $200 billion (approximately 272.8 trillion KRW) could fluctuate depending on the earnings report the next day. Trade Alert's analysis of stock market options positioning for NVIDIA indicated that call (buy) and put (sell) option prices suggest the stock price could move 8.7% in either direction. This means NVIDIA's market cap could swing by up to $200 billion after the earnings announcement. However, this is below the average of 12% observed over the past eight quarters.
NVIDIA's stock price has surged about 92% so far this year. Dan Niles, founder of Niles Investment Management, appeared on CNBC and compared NVIDIA's position in the AI boom to Cisco's central role in building the internet in the 1990s. He emphasized that although Cisco's stock experienced several dramatic declines over three years, it ultimately rose 4000% from its peak in 2000. He argued that NVIDIA will go through a similar cycle, apart from short-term corrections. He said, "We are still in the early stages of AI development," adding, "NVIDIA's earnings will increase 3 to 4 times over the next 3 to 4 years from current levels, and the stock price will follow accordingly."
Currently, inside and outside the market, the key factor for NVIDIA's stock direction is how well the transition to the next-generation AI chip, Blackwell, scheduled for release at the end of this year, is executed. There could be a lull as purchases of the older Hopper model are put on hold while awaiting Blackwell's launch. The development of proprietary chips by major big tech companies such as Amazon and Apple is also cited as a variable. However, despite reports that Amazon halted existing semiconductor orders as Blackwell's release approached, NVIDIA's stock closed higher that day. Piper Sandler predicted that even if big tech companies develop their own chips, NVIDIA will not lose significant market share.
Will It Signal a Summer Rally? NVIDIA Earnings Become a Key Variable
NVIDIA's earnings, which have driven the AI rally so far, inevitably have an impact on the overall New York stock market, which is currently hitting all-time highs. FxStreet noted that although the global stock rally has expanded recently and the market is not solely focused on the AI rally, "NVIDIA's earnings are important to overall market sentiment." MarketWatch also cited a survey of Wall Street investment firms, identifying NVIDIA's earnings as one of the biggest risks to the New York stock market.
On the day before the earnings announcement, AI-related content was central at events held by Microsoft (MS), Google, and others, reaffirming the presence of AI leader NVIDIA. Goldman Sachs reported an increase in AI mentions during first-quarter corporate earnings announcements. Particularly in the energy sector, where the AI boom is expected, only 19% of companies mentioned AI a year ago, but this surged to 66% this year.
Yahoo Finance stated, "From a big-picture perspective, investors will closely watch NVIDIA's earnings report in relation to AI demand," adding, "Whether NVIDIA continues or stops its trend of surprising investors with strong earnings and guidance could affect various sectors." Steve Sosnick, chief strategist at Interactive Brokers, predicted that if signs of slowing demand for NVIDIA's products are confirmed in this earnings report, it could negatively impact the overall New York stock market.
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