The biggest suspense of the US stock earnings season will be revealed! Can Nvidia reignite the market
楚一帆
发表于 2024-5-20 15:50:53
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Driven by economic data and corporate financial reports, the US stock market seems to have emerged from last month's trough. Institutions that track historical trends have found that rapid rebounds from similar scale adjustments often have sustainability. Is it the same this time?
Against the backdrop of relatively weak economic data, technology stocks that have recently rebounded are highly expected. This week's Nvidia financial report may become a new catalyst for the market, determining whether the market can open up more space.
Technology stocks are expected to continue to dominate the US stock market
After inflation data helped the US stock market hit a historic high last Wednesday, the next two trading days were slightly lackluster, and investors are looking for new opportunities behind the changes in market sentiment. This week, the US economic data is slightly lackluster, and the performance of technology stocks may become a key driver of market momentum.
Since the beginning of this year, many investors have chosen to reduce their risk exposure to technology giants due to concerns about valuation and rapid growth rates. Berkshire Hathaway's 13F report released last week showed that its largest holdings in Apple were reduced by over 100 million shares. Coincidentally, legendary investor Stanley Druckenmiller's funds have reduced their holdings in Nvidia. In a recent report released by Citigroup, it pointed out that long positions in US technology stocks have approached multi-year lows.
The weakness of technology stocks also brought an end to the strong performance of the US stock market in the previous five consecutive positive months in April, with the S&P 500 index falling more than 4% in a single month, marking the largest decline in nearly half a year.
With the return of risk appetite driven by the expected rebound in interest rate cuts by the Federal Reserve, US stock prices have resumed their upward trend this month. Market strategists who track historical trends say that when the stock market recovers from similar scale pullbacks, it often goes further. According to Keith Lerner, Co Chief Investment Officer of Trust Advisory Services, the S&P 500 index has seen a median increase of 17.4% after rebounding from a correction of around 5% in the past. As of last Friday, the index has risen nearly 7% from its April low. Lerner said, "Once a low point is found, the market usually goes further than what we have seen so far."
If the time cycle is further extended, the upward space of the current bull market will be greater. Lerner's research shows that since the 1950s, the median increase in bull markets has been 108%, while the S&P 500 index has only risen by 50% since October 2022. At the same time, the median bull market cycle is 4.5 years, and now it has just reached 1.5 years.
Optimistic views suggest that the US economy is heading towards a so-called soft landing, and positive factors such as predictions of strong profits in the technology industry will drive the stock market further upwards. This fiscal quarter, Google's parent company Alphabet announced its first dividend payout, with sales and profits significantly better than expected in the first quarter. Apple also announced a $110 billion stock buyback plan, a new record for a US listed company.
Some institutions are also becoming increasingly optimistic about the prospects of technology giants. Jessica Rabe, co-founder of DataTrek Research, said that in the past 30 days, the average profit forecast for 2024 for the six technology giants that have already announced their results has increased by 2.1%, while the overall S&P 500 index has only grown by 0.1%.
"Although the 'big tech' industry has not performed well so far this quarter, we expect them to soon regain their leading position and help the US stock market outperform other markets," said Diana Iovanel, a macromarket economist at Capital Investment
Can Nvidia live up to expectations
Since May, Nvidia, known as the "leader of the US stock market" by investors, has risen by over 9%, returning to $900 and once again approaching historical highs.
On May 22nd local time (this Wednesday), this chip giant will release its latest financial report. Many institutions expect Nvidia to usher in another strong quarter. According to analyst forecasts compiled by Visible Alpha, the company's revenue for the first quarter of the fiscal year 2025 is expected to reach $24.65 billion, a year-on-year increase of over 200%. Previously, the company provided a revenue guidance of $24 billion, with an expected net profit of $12.87 billion, a year-on-year increase of over 530%.
Oppenheimer analyst Rick Schafer pointed out that it is clear that the market's demand for artificial intelligence chips is "never satisfied.".
As Nvidia prepares to start supplying Blackwell's new flagship chips later this year, Wall Street has turned its attention to the future. Nvidia CEO Huang Renxun believes that with new challenges from major competitors such as IBM, the annual growth rate of the data center market will reach $250 billion, and Nvidia will gain a larger share than other chip companies.
Jeffrey analyst Blayne Curtis said that when discussing Nvidia recently, investors want to know if demand will accelerate as customers prepare for Blackwell's launch. "We often hear concerns, but we haven't seen any signs because (cloud service providers) are still catching up with supply, and there are a large number of customers behind them who are unable to obtain products." He further analyzed that "GB200 NVL products are an important driving factor in the story, as Nvidia will once again expand its (industry) control to a larger part of artificial intelligence system design."
In contrast, Bank of America Securities analyst Vivek Arya is slightly cautious, believing that Nvidia's stock price may fluctuate in the short term, partly due to the risk of performance slowdown before Blackwell supply.
Although some investors expect sales guidance of nearly $28 billion this quarter, Aya believes that revenue growth may slow to a range of 7% to 8%, which is far lower than the level of over 10% in previous quarters. In addition, investors will closely monitor whether the gross profit margin has reached its peak. "The decline in data is caused by pricing pressure, unfavorable combinations (H20 shipments and/or more inference units), and signs of slowing demand/supply relaxation," he wrote.
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声明:该文观点仅代表作者本人,本文不代表CandyLake.com立场,且不构成建议,请谨慎对待。
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