Nvidia stock price soared before earnings announcement, led by datacenter demand and AI market.

Nvidia stock price soared before earnings announcement, led by datacenter demand and AI market.
November 20, 2024

Shares of semiconductor manufacturer Nvidia surged. On the Tuesday ahead of the company's third-quarter earnings report, analysts revised their performance outlook upwards, forecasting revenue to reach $33.29 billion, an 84% increase from the previous year. The significant growth in the datacenter segment is the driving force behind this.
The focus of the market is on the upgrade of Stifel analyst's 'buy' rating and target stock price. The analyst pointed out that the increasing demand for AI calculations and the growth of hyperscale datacenter sector support the expansion of the market size in the mid to long term. During Tuesday's trading, the company's stock price rose by over 4%, reaching $146.54.
Nvidia has established its position as a key player in the AI market, and expectations for business expansion are high. The stock price has nearly tripled since the beginning of the year, with growth in the datacenter and cloud computing sectors driving its growth.

In Nvidia's third-quarter earnings report, the noteworthy achievement is the record sales in the company's datacenter division, a key factor supporting the forecasted performance of $33.2 billion, an 84% increase from the previous year. With the rapid expansion of demand for high-performance computing and AI calculations, the datacenter business is at the core of the company's growth. According to Visible Alpha's report, this growth is particularly driven by advancements in cloud data centers and enterprise edge computing.
As AI technology rapidly evolves, the importance of datacenters is growing, with Nvidia's GPUs supporting its foundation. Large-scale computational power is required for training and inference of AI models, and the company's processors like H100 and A100 have overwhelming advantages compared to other products, supporting the significant increase in sales. On the other hand, competitors are increasingly vying for market share, necessitating new technological innovations for Nvidia to maintain its share.

Stifel analyst points out the current situation where the demand for AI calculations exceeds supply, stating that this is a key factor supporting Nvidia's growth. According to the analyst's estimates, the market size is expected to exceed $100 billion by the end of 2025 and could even approach $1 trillion. As AI technology becomes more widespread, creating new demand in a wide range of industries such as finance, healthcare, and energy, Nvidia plays a central role as a key source of supply.
On the other hand, changes in supply chain and competitive environment may affect long-term market growth. In particular, geopolitical risks and the pace of adoption in emerging markets could influence forecasts. In order for Nvidia to continue leading the market in the future, strengthening its global supply chain is essential, in addition to product innovation.

As a means to respond to stock price fluctuations of high-profile companies like Nvidia, the evolution of trading tools is also crucial. XSP® index options, known as 0DTE (Zero Days to Expiry) transactions, provide a flexible strategy to capture short-term price movements. Swift trading is possible immediately after news announcements, particularly effective when responding to market events or unexpected surprises.
Following the news of Stifel raising its target stock price, Nvidia's stock price recorded a rise of over 4% on Tuesday afternoon. Tools like XSP options provide cost-effective choices as trading strategies to respond promptly to significant price movements. For investors, swiftly responding to market trends while managing short-term risks is extremely important for securing profits.

It is the end.