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

Zacks Equity Research

In the latest trading session, Nvidia (NVDA) closed at $250.05, marking a +0.85% move from the previous day. This move outpaced the S&P 500's daily gain of 0.03%. At the same time, the Dow lost 0.03%, and the tech-heavy Nasdaq gained 0.14%.

Prior to today's trading, shares of the maker of graphics chips for gaming and artificial intelligence had gained 3.91% over the past month. This has lagged the Computer and Technology sector's gain of 6.3% and outpaced the S&P 500's gain of 3.23% in that time.

Investors will be hoping for strength from NVDA as it approaches its next earnings release. The company is expected to report EPS of $1.66, up 107.5% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.96 billion, up 34.16% from the year-ago period.

NVDA's full-year Zacks Consensus Estimates are calling for earnings of $5.56 per share and revenue of $10.77 billion. These results would represent year-over-year changes of -16.27% and -8.07%, respectively.

Investors should also note any recent changes to analyst estimates for NVDA. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.16% lower. NVDA is currently a Zacks Rank #3 (Hold).

In terms of valuation, NVDA is currently trading at a Forward P/E ratio of 44.62. This valuation marks a premium compared to its industry's average Forward P/E of 20.38.

We can also see that NVDA currently has a PEG ratio of 4.77. 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 2.59 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 59, which puts it in the top 24% 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.

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


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