<NVIDIA falls 10% > What is the real factor? What are your future highlights?
It is representative of the AI boom $NVIDIA (NVDA.US)$fell by as much as 10% on 4/19Also, there is turmoil in the market. This timeTriggers that led to stock price declinesCheck it out,Consider the real factors of decline based on the market environmentI tried. Also check future points of interestI want to keep it.
NVIDIA shares fell 10% in 1 dayWhat I did wasNVIDIA itself did not reveal bad material. Of the declinetriggersmanufactures servers equipped with NVIDIA AI semiconductors $Super Micro Computer (SMCI.US)$SMCI shares fell 23% after not announcing provisional earnings valuesThat's what I did. Since SMCI manufactures and sells servers equipped with NVIDIA AI semiconductors, the company's performance trends have been recognized as a barometer for measuring sales and demand trends for NVIDIA products.
For example,SMCI on 1/19 this yearAbout the 2023-10-12 termStrong preliminary results announcedWhen you do it,Materials showing strong demand for AI servers and NVIDIA AI semiconductorsIt was captured as. On that day, SMCI shares rose 36% and NVIDIA shares rose 4%. After that, SMCI announced good financial results on the financial results announcement date of 1/29, according to the preliminary preliminary values in advance. NVIDIA also announced results and guidance that exceeded expectations on 2/21.
However, this timeOn the occasion of the announcement of financial resultsSMCI did not disclose provisional values that are usually announced in conjunction with the announcement of the date and time of financial results announcements. Since the preliminary figures were announced well last time,The postponement of publication was taken as an indication of the possibility that performance details were not good. There was also speculation that demand for AI semiconductors might not be as high as expected.I also started with ASML and TSMC's financial resultsisIt has been shown that the recovery of the semiconductor market as a whole will take timeIt was easy for investors to lean towards bad interpretations.
NaoThe reason investors were disappointed with the financial results of ASML and TSMC is yes in the AI semiconductor field. Both companies stated at this financial results briefing that demand for AI semiconductors continues to be strong. What did not meet investors' expectations was semiconductors for smartphones and computers, in other wordsThere is a possibility that recovery in fields other than AI semiconductors will be delayed more than expectedThat's it (※<Semiconductor stocks, footsteps of Cellinmay?! > Decline factors and AI semiconductor demand as seen from TSMC & ASML financial resultsPlease refer to).
Why are investors so nervous about not announcing SMCI's provisional earnings resultshas it become? The following two factors are considered to be the main factors.
1) Increased profit-taking selling pressure
2) Decreased risk tolerance among investors in response to a sharp rise in US 10-year government bond yields
1) Increased profit-taking selling pressure
2) Decreased risk tolerance among investors in response to a sharp rise in US 10-year government bond yields
The stock prices of NVIDIA and SMCI were 1.7 times and 3.3 times higher than the end of 2023, respectively, before the fall on 4/19. It is easy to imagine that profit-taking sales pressure has been built up to some extent. This seems to have led to sales pressure in terms of supply and demand.
Interest rate levels and interest rate trends are becoming important as factors affecting investors' risk sentiment.The current market environmentWhen I checked,Warning against “higher for longer” (higher for longer) US policy interest ratesIs growingThe yield on 10-year US bonds has skyrocketedI'm doing it. Based on past cases, downward pressure is likely to be applied to stock prices at that time.
For example,Last timeWhy did US 10-year bond yields rise rapidly due to caution against “higher for longer”Between mid-July and the end of October 2023that's it. At that time,Investors strengthened their risk aversion and oversold stocksThat's it. Major indices were adjusted, and the Philadelphia Semiconductor Stock Index (SOX index) also fell sharply (the orange color is the SOX index, the white color is the US 10-year government bond yield, and NVIDIA is the green line).
Meanwhile, NVIDIA stocks are doing wellIt's ready.At that timeIn the stock price range ($400-$500)The biggest drop rate is about 20%It was. After that, investor sentiment improved along with a decline in 10-year government bond yields at the end of 2023/10. The SOX index bottomed out, and NVIDIA stocks picked up.
It's unclear whether price movements will be similar to last time,Check the current rate of decline just in caseLooking at it, NVIDIA stocks fell on 4/19 to the beginning of the year19% down from highThat's going to happen.The closing price on 4/19 was at the level before good financial results were announced in FebruaryIt also hits. In other words, stock prices have been pushed back to the level before financial results were announced in February. NVIDIA stocks rebounded on 4/22, probably because these factors had an effect. Based on the fact that the technical indicator RSI fell to 30% of short-term oversales, it seems that technical factors also led to a rebound.
Regarding NVIDIA's profit-taking sales,There are also voices pointing out the high value in terms of valuationIt's there. However,NVIDIA's predicted PER (price-earnings ratio) is currently 31 timesIt is, and compared to the past average,It can never be said that it is expensive。
However, the expected PER for the NASDAQ 100 Index is 25 times higher, and compared to the index, NVIDIA's valuation may be slightly higher. On the other hand,When earnings forecasts are taken into account, it is difficult to say that it is expensive. For example, when compared to Magnificent Seven, which is the main component of the NASDAQ 100 Index, NVIDIA's growth rate is overwhelmingly high. Specifically, the net profit (after adjustment) growth rate for the 2024/1-3 fiscal year continues with NVIDIA at 405%, Amazon Dotcom at 149%, and Meta at 99%.
On the other hand, earnings forecasts are just predictions, and a company's performance does not necessarily match analysts' predictions.How to capture the contrast of predictionsAs forLarger to investor sentimentDepends. Generally,When investors' risk tolerance is highisTends to think optimistically about predictionsand, on the contraryRisk tolerance is decliningThen, I wonder if the results will be as expectedProne to anxiety. The fact that SMCI and NVIDIA stock prices fell drastically because SMCI did not announce provisional performance values is thought to reflect the latter.
Therefore, when there are movements leading to improvements in investors' risk sentiment (for example, long-term US interest rates fall), or when NVIDIA announces results (financial results that exceed expectations) that can dispel investors' anxiety, there is a high possibility that it will lead not only to a short-term rebound, but also to a more sustainable stock price pick-up.
★ NVIDIA financial results announcement
The reason that has supported NVIDIA's stock price is that NVIDIA has continued to produce results that exceed market expectations over the past few quarters. Therefore,What is more important than anything else is NVIDIA's own financial results announcementLet's be.
The reason that has supported NVIDIA's stock price is that NVIDIA has continued to produce results that exceed market expectations over the past few quarters. Therefore,What is more important than anything else is NVIDIA's own financial results announcementLet's be.
NVIDIA's scheduled to be announced on 5/22Earnings for the February-April periodAccording to market forecasts (as of 4/22), sales are expected to be 3 times the same period last year, 9% increase from the previous quarter, net profit 5 times the same period last year, and 7% increase from the previous quarter.
As for the futureThe “most powerful semiconductor in the world” announced in March this year (from NVIDIA's announcement)Since AI semiconductors equipped with “Blackwell” will be shipped from the latter half of the year, they can be expected to contribute to 2025 business resultsIt is expected. At the financial results presentation in late May, it seems that the production and demand situation of “Blackwell” and the impact on the “H100” (currently the best-selling AI semiconductor) due to the introduction of “Blackwell” will attract attention.
★ Financial results announcements for major tech companies
NVIDIA's financial results will be announced in late May, so there is 1 month until then. By then, Magnificent Seven, other than NVIDIA, is scheduled to announce financial results.This year's stock prices have also been led by Magnificent Seven, with NVIDIA at the head, so for the time being, the financial results of the main companies will be in the spotlight。
NVIDIA's financial results will be announced in late May, so there is 1 month until then. By then, Magnificent Seven, other than NVIDIA, is scheduled to announce financial results.This year's stock prices have also been led by Magnificent Seven, with NVIDIA at the head, so for the time being, the financial results of the main companies will be in the spotlight。
When major tech companies other than NVIDIA announce financial results that fall below market expectations, there is a possibility that downward pressure will also be applied to NVIDIA stocks. Conversely, if the financial results of the main companies improve, tech stocks will be able to regain the trend of stock appreciation. However, considering that investors' risk sentiment is increasing due to the rise in long-term US interest rates, there is a possibility that attention will be drawn to future prospects shown by the company side, in addition to actual results in the current financial results.
Also,One important item for NVIDIA regarding the financial results of major tech companiesThere is. It isCapital investment plans of each companythat's it. because $Microsoft (MSFT.US)$ Ya $Meta Platforms (META.US)$ 、 $Amazon (AMZN.US)$ 、 $Alphabet-A (GOOGL.US)$ etc.Expanding investments for AI data centersThanks to doing it,NVIDIA's sales are growing rapidlyI've done it. NVIDIA sells AI semiconductors to other industries and government agencies, but the scale is still not high compared to the capital investment amounts of major tech companies mentioned above. Investments in AI by major tech companies are still considered important in the short term for NVIDIA's performance.
According to Bloomberg,Tech giants' capital investments are expected to increase in 2024that's it. For example, what is the capital investment amount of Microsoft, Alphabet, and Meta in 202425-30% increase compared to the same period last yearIt is expected that will happen.Investments in AI data centers are mainly driving the increaseIt is expected that will happen. If this can be confirmed in the financial results of major tech companies this time, it will be positive material for NVIDIA.
Created April 23, 2024 Market Analyst Amelia
Source: Company materials, created by Bloomberg by Moomoo Securities
Source: Company materials, created by Bloomberg by Moomoo Securities
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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chintara0127 : It's an article that makes me feel more secure.
182639895こんさん : I would like to thank those who wrote this document.
Good points, good points, careful points, no shade, no sunlight, no flexibility, calm, unbiased analytical ability, excellent, and intelligent!
It was a bit of science, so I think the writing is well-balanced and excellent!
Thank you very much. m (__) m great thanks
182639895こんさん : The one that was great at Suimasen was cut to pieces. Please forgive me.
182639895こんさん chintara0127 : Thank you very much. m (__) m
I'm considering that generative AI is just a preface. I think other companies will follow suit furiously, but I'm considering that the place that has improved due to 10 years of chewing sand is that the company that started this far due to a long day has had the feeling of chewing sand for 10 years!