STOCK OF THE WEEK: Nvidia sees shares nearly triple in value this year
The American chip designer who tried to buy British rival Arm, and is popular with some of the UK’s top stock pickers, has seen its shares nearly triple in value so far this year.
This has made Nvidia the best-performing stock in the S&P 500. So there will be a lot of interest when it releases its second-quarter results on Wednesday, particularly among investors who own the stock through funds like Bailie Gifford American and Scottish Mortgage Investment Trust. .
One of the so-called Magnificent Seven along with American corporate giants Alphabet, Amazon, Apple, Meta, Microsoft, and Tesla, Nvidia has helped drive a substantial chunk of US stock market gains this year.
As such, expectations are high, with revenue expected to hit £8.6bn, well above sales of £5.3bn in the same period last year. Boss Jensen Huang will be eager not to disappoint.
“The foamier titration increases the possibility of overreactions in case next week’s results are disappointing,” warns Sophie Lund-Yates of Hargreaves Lansdown.
Analysts expect third-quarter sales of £9.3bn, up from £4.6bn a year earlier.
For much of the last 30 years, Nvidia’s success has come from computer gaming, with its chips like Call Of Duty. But its chips are also favorites for artificial intelligence, or AI, and when OpenAI launched ChatGPT last year, it contained more than 20,000 graphics processors made by Nvidia.