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Nvidia (NVDA) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3 min read

In the latest trading session, Nvidia (NVDA) closed at $545.82, marking a +1.09% move from the previous day. This move outpaced the S&P 500's daily gain of 0.47%. Meanwhile, the Dow gained 0.4%, and the Nasdaq, a tech-heavy index, added 0.33%.

Coming into today, shares of the maker of graphics chips for gaming and artificial intelligence had gained 7.83% in the past month. In that same time, the Computer and Technology sector gained 6.61%, while the S&P 500 gained 3.42%.

Wall Street will be looking for positivity from NVDA as it approaches its next earnings report date. On that day, NVDA is projected to report earnings of $2.57 per share, which would represent year-over-year growth of 44.38%. Meanwhile, our latest consensus estimate is calling for revenue of $4.42 billion, up 46.59% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.13 per share and revenue of $15.83 billion, which would represent changes of +57.69% and +45.02%, respectively, from the prior year.

Any recent changes to analyst estimates for NVDA should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.26% higher within the past month. NVDA is currently a Zacks Rank #2 (Buy).

Digging into valuation, NVDA currently has a Forward P/E ratio of 59.17. This represents a premium compared to its industry's average Forward P/E of 29.37.

Investors should also note that NVDA has a PEG ratio of 2.95 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. Semiconductor - General stocks are, on average, holding a PEG ratio of 3.05 based on yesterday's closing prices.

The Semiconductor - General industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 208, which puts it in the bottom 18% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow NVDA in the coming trading sessions, be sure to utilize Zacks.com.


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