As the financial world braces itself for Nvidia’s upcoming quarterly report, the stage is set for a potentially groundbreaking revelation. With a staggering market capitalization nearing $3 trillion, the tech giant is expected to showcase a remarkable sales surge, potentially doubling its previous year’s numbers.
The High Stakes Anticipation
Nvidia’s impact on the stock market extends far beyond its own realm, setting the tone for a flurry of activity across various sectors. The much-anticipated report, scheduled for release post the main US trading session on Wednesday, holds the promise of significant market movements.
Meeting and surpassing such lofty expectations is no mean feat. While the company has a track record of impressing investors with its performance, the pressure to maintain an optimistic revenue forecast without letting down stakeholders looms large.
The options market buzzes with speculations of a potential 10% price swing post-report, aligning with the notable fluctuations witnessed in previous releases, such as in May, February, and August of last year.
Market Speculations and Implications
If Nvidia manages to soar to new record highs, breaching the $141 threshold, it could catapult its market capitalization to nearly $3.5 trillion. This would cement its fierce competition with tech behemoth Apple for the coveted top position.
Positive news emanating from Nvidia could act as a catalyst for major US stock indices to reclaim or even surpass their previous all-time peaks. This would mark a resilient comeback from the recent turbulence triggered by carry trade adjustments in late July and early August.
Conversely, any disappointment in the quarterly report might unleash a wave of selling pressure, particularly in AI-related equities that have enjoyed a prolonged bull run for the past couple of years. Such a scenario could reignite concerns reminiscent of the dot-com bubble burst of 2000.
Charting Potential Movements
A sharp downturn in Nvidia’s stock price could signal a deeper market correction, emphasizing the existing disparity between price action and the Relative Strength Index (RSI) on daily charts. This could potentially drive the stock towards the $90 zone, nearing recent lows and converging with the 200-day moving average.
Yet, a retreat from historical highs may not spell the ultimate conclusion of Nvidia’s trajectory. A scenario where the stock retraces around the 61.8% Fibonacci level post an early August setback would align with a typical correction pattern from the global rally initiated in early 2023 up to the June 20 peak.
Should Nvidia breach this retracement level, it could set the stage for an “extension” phase, unlocking an upbeat target of $220 amidst a renewed investor optimism.
