NVIDIA earnings preview: AI, ROCE – all you need to know
NVIDIA’s tech advances, which support AI, have helped the stock close in on its all-time high set in November 2021, but will it get there? IGTV’s Angeline Ong investigates.
(Video Transcript)
NVIDIA is reporting its first quarter (Q1) numbers after the bell, the street looking out for earnings of 92 cents per share, aA32% drop compared to the first quarter of 2022. Sales also expected to fall by 21% to $6.5 billion.
Now, NVIDIA has been another active stock, a good one for those wanting volatility and it has also achieved this in its upward climb from around the October 2022 level.
NVIDIA has been one of those beneficiaries if you like of the pandemic and also lockdown as more and more people wanted to either work from home or play more games because they couldn't go out. It's more than double the stock since the beginning of the year and is closing in on its all-time high set in November 2021.
NVIDIA has also earlier this month said that NVIDIA H or H 100 GP US is set to power in part, it's a purpose built a three super computers.
Share price chart
So where is this stock heading? Well, if it continues in this trajectory it might look like the next resistance point is at the 33,000 mark there. But will it get there? Some investors worry that the group will not be able to sustain this very, very steep but ambitious trend.
One figure illustrates these concerns. NVIDIA's ROCE which stands for Return on Capital Employed. It's fallen 32% from 5 years ago to 16% and it remains above an average of 16% in the sector, but nonetheless, points to diminishing returns.
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