Could the market anticipation lead to a stock market quake today? - Whether you should still invest in Nvidia is discussed by an expert.
Several experts believe that the performance of an AI company's stock will influence the ongoing positive trend in the stock market, at least temporarily.
Stock market specialist Jürgen Schmitt weighs in on the matter: "The anticipation surrounding Nvidia is enormous today. The consensus among analysts is that the graphics chip company will report sales of around $24.6 billion and earnings per share of $5.60. In the previous year, Nvidia generated $7.2 billion in revenue and $1.09 in EPS."
This translates to a massive increase in revenue (+240%) and an even more impressive jump in profits (+413%). Given this rapid growth, the stock price is expected to continue rising.
Schmitt notes that Nvidia's current market value stands at approximately $2.4 trillion. Based on full-year estimates, the company's valuation is 20 times its sales and boasts a price-to-earnings ratio of 40, which is rather high and doesn't leave much room for disappointment. So, if Nvidia falls short of expectations or just meets them, the share price may experience a temporary decline.
The expert views the decision to buy beforehand as a gamble: heads or tails? Schmitt believes the chances are 50-50.
Although he remains bullish on Nvidia shares long-term, Schmitt cautions potential investors to brace themselves for significant volatility and short-term corrections, potentially reaching 30%, 40%, or even 50% over the next few years.
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Source: symclub.org
