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Nvidia (NVDA) Gains But Lags Market: What You Should Know

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In the latest trading session, Nvidia (NVDA) closed at $179.84, marking a +1.09% move from the previous day. This move lagged the S&P 500's daily gain of 1.21%. Meanwhile, the Dow gained 1.03%, and the Nasdaq, a tech-heavy index, added 0.14%.

Coming into today, shares of the maker of graphics chips for gaming and artificial intelligence had gained 14.46% in the past month. In that same time, the Computer and Technology sector gained 2.22%, while the S&P 500 gained 3.2%.

Nvidia will be looking to display strength as it nears its next earnings release, which is expected to be August 24, 2022. On that day, Nvidia is projected to report earnings of $1.26 per share, which would represent year-over-year growth of 21.15%. Meanwhile, our latest consensus estimate is calling for revenue of $8.12 billion, up 24.83% from the prior-year quarter.

NVDA's full-year Zacks Consensus Estimates are calling for earnings of $5.39 per share and revenue of $33.68 billion. These results would represent year-over-year changes of +21.4% and +25.14%, respectively.

Investors might also notice recent changes to analyst estimates for Nvidia. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.33% lower within the past month. Nvidia is currently a Zacks Rank #4 (Sell).

Digging into valuation, Nvidia currently has a Forward P/E ratio of 33.04. Its industry sports an average Forward P/E of 11.11, so we one might conclude that Nvidia is trading at a premium comparatively.

We can also see that NVDA currently has a PEG ratio of 2.27. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NVDA's industry had an average PEG ratio of 2.13 as of yesterday's close.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 90, which puts it in the top 36% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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