Nvidia stock rises ahead of earnings, the surprising reason behind it

Nvidia shares fell 2% on Friday, but rose 2.5% on Monday to $947.80.

The company is scheduled to announce first-quarter earnings on Wednesday. The stock has been trading in the range of $850 to $950 since late March, but temporarily exceeded the closing high of $950.02 during last week's intraday trading.

According to a public opinion poll by FactSet, the Wall Street consensus estimate is that NVIDIA will report revenue of $24.57 billion and earnings per share of $5.57. However, multiple analysts suggest that in order to meet the high market expectations, NVIDIA needs to report revenue close to $26 billion and provide guidance to achieve similar growth this quarter.

Susquehanna analyst Christopher Rolland stated in a research note on Monday that he continues to believe that at least a $1.5 billion improvement in revenue is needed for a flat response. He raised the price target for NVIDIA stock from $1,050 to $1,100 and maintained a 'positive' rating.

The biggest concern is whether NVIDIA will indicate a short-term slowdown in demand for current chips while preparing for orders for the upcoming release of the new Blackwell series later this year.New Blackwell serieswhile preparing for orders for the upcoming release of the new Blackwell series, the concern is whether NVIDIA will suggest a short-term slowdown in demand for current chips.

However, according to Semiconductor Analyst Daniel Pilling of Sands Capital, those concerns are exaggerated. He points to evidence of an economic slowdown, such as the strong market price of Nvidia's existing H100 chips, and the increase in investments by major technology companies in artificial intelligence infrastructure.

"I have sufficient evidence to suggest that the numbers will be much better than the market consensus," said Pilling.

Nvidia's stock has risen by 87% from the beginning of the year to the Friday closing price. In comparison, during the same period, the S&P 500 index rose by 11%, and the Nasdaq Composite Index rose by 11%.