Nasdaq 100: Nvidia share price and Q1 earnings results preview

When are Nvidia’s results expected?

NVIDIA Corp (All Sessions) is set to release its first quarter (Q1) 2023 results on 25 May 2023. The results are for the fiscal quarter ending April 2023.

What is ‘The Street’s’ expectation for the Q4 results?

‘The Street’ expectations for the upcoming results are as follows:

Revenue of $6,514 billion : -21.40% year on year (YoY)
Earnings per share (EPS): $0.92 (-32.35% YoY)

The Nvidia share price has recently been boosted by Alphabet Inc - C (All Sessions)’s AI investments and as the company announced that its A3 supercomputers are in part powered by Nvidia’s H100 GPUs.

This comes after Nvidia earlier this year launched its highly anticipated new RTX 4070 graphics card, its Nvidia GeForce RTX 4090 processor with its RTX Video Super Resolution now being integrated into the latest Chrome and Edge browser updates, all of which has been well received by the financial markets.

Some investors worry, though, that the company’s stratospheric rise in its share price – by over 100% this year already and a staggering 370% over the past five years – may not continue as the Return on Capital Employed (ROCE) has halved from around 32% five years ago to around 16% this year. It is still significantly above the semiconductor average of 13% but shows that the reinvestments into its business the company is making lead to diminishing returns.

How to trade Nvidia into the results

Refinitiv data shows a consensus analyst rating of ‘buy’ for Nvidia – 13 strong buy, 23 buy and 12 hold - with the median of estimates suggesting a long-term price target of $300.00 for the share, roughly 3.5% higher than the current price (as of 16 May 2023).

IG sentiment data shows that 87% of clients with open positions on the share (as of 16 May 2023) expect the price to rise over the near term, while 13% of clients expect the price to fall whereas trading activity over this week showed 51% of sells and this month.

Nvidia – technical view

The Nvidia share price has risen by an impressive 102% year-to-date with it fast approaching most fundamental analysts’ target share price of $300, a level last traded in January 2022, and the next technical upside target of the late December 2021 high at $313.30.

Once bettered, the Nvidia’s share price all-time record high at $346.47 will be in sight.

Nvidia Weekly Chart

On the daily chart Nvidia has broken out of its March-to-April sideways trading range and entered a new sideways range during May which shows an upward bias though, since a series of higher highs and lows can be detected.

Therefore the odds favour a further advance which should soon take the Nvidia share price to above its psychological $300 mark towards its all-time record high, provided that no (currently unexpected) bearish reversal takes the share price back below its late April low at $262.25 on a daily chart closing basis. Only then would the medium-term uptrend become more fragile.

Nvidia Daily Chart

Immediate support can be seen along the 2023 uptrend channel support line at $280.60 and at Friday’s low at $280.46 with further support being found at the early May low at $272.40.

Summary

Nvidia is set to release Q1 2023 results on 25 May 2023.

Q1 2023 results are expected to show a 21.40% YoY decrease in revenue and a 32.35% decrease in EPS.

Revenue is expected to be boosted by the company’s new graphics cards and video upscaling software which feature in the latest Chrome and Edge browser updates and by Alphabet’s AI investments and its A3 supercomputers using Nvidia’s chips.

Long-term broker consensus suggests the share to currently be a ‘buy’, with a median price target of $300.00, roughly 3.5% higher than the current price.

87% of IG’s clients with open positions are long the share but trading activity this week shows 51% of sells and this month 62% of sells.

The Nvidia share price has been rising by an impressive 102% year-to-date and is on track to soon overcome fundamental analysts’ $300 price target whilst aiming for its all-time record high at $346.47. The medium-term uptrend will remain intact while the late April low at $262.25 underpins on a daily chart closing basis.