Nvidia Reports Earnings. Now What Happens?

The market traded nervously and erratically on Wednesday as investors awaited the Nvidia NVDA earnings report. A late rally sent the indexes back up to nearly flat, but breadth was weak, with about 4,000 gainers and 5,400 decliners. The most notable weakness was in the Magnificent Seven names, including Nvidia, which lost about 0.5%.

Coming into the report after the close, Nvidia needed a very strong beat to send itself and the indexes higher, but if it failed to meet expectations, then traders were watching for the post-election gap to be filled. For the QQQ, that would be a move down to around 491 or a loss of a little more than 2.2%.

Nvidia is reporting Q3 EPS of $0.81 vs $0.75 consensus and revenues of $35.08 billion versus expectations of $33.15 billion. While those are good numbers, they are not good enough at first glance. The stock initially traded lower but bounced back on revenue guidance of $36.75 billion-38.25 billion vs. $37.09 billion previously.

While Nvidia's results are not quite the blowout that was hoped for, they are good enough for analysts to reiterate their ratings and increase their targets. I believe that the stock will likely sell off more before dip buyers step up, but the conference call is likely to be quite positive and will help provide support. I see no need to rush in and buy at this point.

After the news is digested, we will see how it impacts the broader market. This is not a report that is going to trigger a big rally, but it isn’t terrible, and there should be some support 2% lower.

Have a good evening. I’ll see you Thursday.

At the time of publication, Rev Shark was long NVDA.