The technology giant Nvidia today presents results that will be key to taking the tone of the artificial intelligence sector and confirming whether the skyrocketing valuations that are being seen are justified. Technology companies have been the great driver of parquet floors in the last year and any doubt can weigh heavily on the stock markets.
"The market sees Nvidia's results as a barometer of artificial intelligence," said Stephen Innes, partner at SPI Asset Management. A surprise in its results could have effects on the entire market, he said. If they are negative, they will reflect that companies are less willing to invest in software and cybersecurity and would call into question the stock market boom of AI and the like.
Such is its impact that Goldman Sachs has called it “the most important stock on the planet.” Whether for better or worse, Nvidia could shake the markets due to its influential weighting in the indices and the weight of long positions, which are betting on a rebound in its value.
The 2023 accounts will be revealed after the market closes, at 11:00 p.m. in Spain. One of the key points will be to know if it meets its forecast of earning 20,000 million dollars in the last quarter, which would indicate that the demand for chips for artificial intelligence is consolidated.
The figure would more than triple revenue over last year, driven by growing demand in its data center business, 80% of the manufacturer's sales. Anything below that would be a hit.
Nvidia has to meet the expectations generated: the valuation has climbed to 1.8 trillion dollars, after its shares have risen 40% so far this year and more than 200% in twelve months. With that market capitalization it is one of the largest listed companies in the world. "The company cannot disappoint," warned Christopher Dembik, an investment advisor at Pictet.
There is nervousness and a lot at stake. The company's shares fell 4.4% this Tuesday amid growing investor expectations. After the closure, another 2% was left. Of the seven magnificent ones - Nvidia, Amazon, Apple, Meta, Alphabet, Tesla and Microsoft - only Alphabet closed this Tuesday positively, but with a minimal revaluation (0.3%).
The results of another recent star of the technology sector, the cybersecurity company Palo Alto Networks, have disappointed by cutting its revenue forecasts. This Tuesday he stated that he will go from earning around 8.2 billion this year to around 7.950-8.000 million, but more than expected by analysts. Those insights suggest that customers may be reducing their spending intentions even as online attacks proliferate.
He has also paid for it in the stock market. In their case, the collapse has reached 20% after the market closed. Before cutting its future income, it advanced 120% in the last year.
