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NVIDIA Cruises to New Beat & Raise, Cisco & Sonos Also Beat

·3 min read
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  • NVDA
  • CSCO
  • SONO
  • ^GSPC

Market indexes lost some steam going into the closing bell this Wednesday, with all four majors finishing in the red. The Dow dropped -210 points, -0.58%, and is back on the downside of 36K, the S&P 500 dipped -0.26% and the Nasdaq was -0.33%. Both the S&P and Nasdaq remain within 1% of all-time closing highs. The Russell 2000 fared the worst on the day, -1.17%.

A combination of oil prices tumbling on higher-than-expected supply, along with news of the Delta variant spreading throughout different parts of the world and hitting their economies, met up with higher levels of cyclicals over the latest bullish period that investors saw free to take from off the top a bit. These closing numbers all came before earnings reports this afternoon for NVIDIA NVDA, Cisco Systems CSCO and Sonos SONO.

Microchip innovator and Wall Street darling NVIDIA posted another terrific quarter of earnings and revenues after the closing bell, up +3% in late trading on Q3 beats: earnings of $1.17 per share on sales of $7.10 billion outperformed the $1.11 per share and $6.83 billion expected, respectively. Gross margins also topped expectations, +67% in the quarter.

With NVIDIA’s Data Center revenues coming in hotter than expected on a Gaming segment that continues to accelerate. As a result, NVIDIA has raised revenue guidance next quarter to $7.4 billion — well ahead of the $6.83 billion in the Zacks consensus prior to the release. All this is, of course, ahead of what we might expect from NVIDIA GPUs and software upon the realization of the Metaverse, where the company is expected to be an important player.

NVIDIA came into this earnings report — down in regular trading, by the way, on some scrutiny regarding its recent ARM acquisition has stalled that $40 billion deal — with a Zacks Rank #2 (Buy), even after cruising to +50% gains in the past three months. Year to date, the Silicon Valley mainstay is +123% — and still going. For ideas how to play this latest beat from NVIDIA, don’t miss this analysis from Zacks Strategist Kevin Cook: Where to Buy NVIDIA After Earnings

Cisco beats on its bottom line, as expected — the company has never missed, going back to our overall earnings recalibration in 2013 — 82 cents per share topped expectations by a penny. Revenues of $12.90 billion came up short, however, of the $12.98 billion in the Zacks consensus. That, plus lower next-quarter revenue guidance (on in-line earnings guidance, which as we said never misses) has helped send Cisco shares down -6.6%, giving back nearly all the stock gains the company has made over the past six months. Cisco is still up more than +20% year to date, roughly in-line with the S&P 500.

Home audio developer Sonos SONO shares jumped +4.5% on its fiscal Q4 report Wednesday afternoon: a bottom line of -7 cents per share beat estimates -11 cents, on $359.5 billion, which improved over the Zacks consensus $352 billion. This is Sonos’ sixth-straight earnings beat, and the company also announced a new stock repurchase program worth $150 million. Sonos had already risen +44% year to date.

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