Nvidia (NVDA) Earnings Preview

Few investors worry over NVIDIA Corporation (NASDAQ: NVDA) when it reports quarterly results this week on Thursday. Whereas Advanced Micro Devices (NASDAQ: AMD) dropped sharply after its pre-earnings run-up, Nvidia’s stock is trading well-above the $200 level. The company has no room for disappointing investors.

On October 23, Jefferies raised its price target on NVDA stock to $230, up from $180. Analyst Mark Lipacis, whose calls average 53.5% in return and who has a success rate of 83% over that two-year period, cited more surprises from the company. Both the GPU market and Volta chip will serve the needs of the AI market.

The New York Times wrote that Nvidia will probably sell every DGX-1 chip they produce. Each unit sells for $150,000.

Valuation

Nvidia trades at a P/E of nearly 60 times. Its forward P/E is just as high, at 52 times. But if the company’s EPS grows by over 130 percent and it sustains double-digit sales in the foreseeable future, then investors may justify the high valuation.

Nvidia reports after the market closes, on November 9.