Strength Seen in Nvidia (NVDA): Can Its 5.6% Jump Turn into More Strength?
Zacks Investment Research | Apr 13, 2021 04:18AM ET
NVIDIA NVDA shares soared 5.6% in the last trading session to close at $608.36. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 10.8% gain over the past four weeks.
The share-price rally accelerated after NVIDIA’s CFO Colette Kress said during the company’s annual GPU Technology Conference event that its first-quarter fiscal 2021 revenues will likely exceed the previous guidance of $5.3 billion. Kress stated that the company is witnessing broad-based strength with all of its segments driving upside to the initial outlook.
Price and Consensus
This maker of graphics chips for gaming and artificial intelligence is expected to post quarterly earnings of $3.22 per share in its upcoming report, which represents a year-over-year change of +78.9%. Revenues are expected to be $5.32 billion, up 72.9% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Nvidia, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on NVDA going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank 2 (Buy). You can see Zacks Investment Research
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