Daily Brief - A Stellar Leap Forward

TLDR: In a striking affirmation of its dominance in the tech world, Nvidia Corp. has not only predicted a massive sales gain for the current quarter but has also outpaced analysts' expectations by a significant margin.

Announcing a revenue forecast of approximately $24 billion, surpassing the anticipated $21.9 billion, Nvidia's shares surged by 13% in after-hours trading, reinforcing its dominant status in the rapidly changing world of artificial intelligence (AI) and computing.

Historical data indicates that when Nvidia surpasses earnings expectations by such margins, it usually experiences the most significant gains in the following week, though there's a risk of negative returns thereafter.

Moreover, Nvidia's better-than-expected earnings often serve as a positive signal for the broader market, leading to an overall uptrend during the same period.

However, Nvidia faces a competitive landscape. Rivals like AMD are intensifying their efforts, and major clients, including giants such as Amazon and Google, are considering creating their own AI chips.

Facing regulatory challenges, particularly in crucial markets like China, Nvidia remains determined, pushing the boundaries of innovation and broadening its influence from traditional data centers to global governments and corporations.

Through its recent collaboration with Cisco Systems and the expected launch of more advanced accelerators, Nvidia is well-equipped to navigate the challenges ahead, advancing confidently with strong momentum.

Market Movers: When NVIDIA beats estimates by $0.50?

Here is the historical response from chip stocks on a 1 month horizon, based on previous earnings beats of $0.50 or more:

1. Micron (MU): 7.00%
2. Broadcom (AVGO): 5.45%
3. AMD (AMD): 4.65%
4. Intel (INTC): 4.50%
5. Texas Instruments (TXN): 2.64%
6. Applied Materials (AMAT): 0.66%
7. Taiwan Semiconductor ADR (TSM): -0.90%
8. ASML Holding ADR 1:1 (ASML): -2.04%
9. Nvidia (NVDA): -5.52%

Earnings Update: Booking Holdings reports tonight

Booking Holdings is predicted to report an EPS of $22.08, marking a significant year-over-year increase from $13.52 in Q4'21. This comes amidst relatively low expectations for the company's 2023 performance, with a forecasted revenue growth of 13.6% to $19.24 billion.

Despite impressive recent growth figures, the company has experienced a decrease in EBIT and free cash flow margins compared to pre-Covid levels, suggesting it may not be in a stronger market position than before the pandemic.

Discover how other companies could react post earnings with the help of TOGGLE's WhatIF Earnings tool.