How much is left in Nvidia’s share price with the June quarter results due midweek?
After Fed Chair Jay Powell all but confirmed that a rate cut is 22 days away, one has to wonder if Nvidia and the rest of the megacaps have what it takes to keep the market moving through the rest of the year.
Investors will be looking for stocks that will benefit from rate rises. Consequently, bank stocks rose on Friday, causing the KBW Bank Index to jump nearly 2.4%—one of the biggest one-day gains in a while.
When Nvidia reports its latest quarterly results on Wednesday, analysts are expecting its revenue to surge to $US8.65 billion for the three months ending in June. This would represent a 112% increase from a year earlier, overshadowing the 5% revenue growth likely to be delivered by S&P 500 companies overall for the quarter, according to FactSet.
Throughout the first six months of the year, Nvidia’s stock soared nearly 150%. At that point, the stock was trading at just over 100 times the company’s earnings over the prior 12 months—much more expensive than it has been and compared to the S&P 500 in general.
Nvidia surpassed $US3 trillion in value, joining Apple and Microsoft (and briefly becoming the most valuable), but then sentiment shifted, causing Nvidia’s stock to tumble 27% from a peak in late June to early August. This decline helped drag the S&P 500 down nearly 10% from its all-time high set last month.
The valuation slumped to less than $US2.5 trillion, but following the August 5 slide, the shares steadied and then rose as the market began focusing on the results. Last week, the stock jumped 4.1%, with an additional 4.55% gain on Friday.
This surge propelled Nvidia into second place on the most valuable list, with a market cap of $US3.18 trillion, just ahead of Microsoft at $US3.10 trillion (down 0.5% last week). Apple remains at the top with a market cap of $US3.45 trillion after a 0.6% gain last week.
Aside from Nvidia and Tesla (which was up 6.9% last week), the mega caps saw rises of less than 1%, while Amazon was down 0.28%.
Other companies reporting include mostly retailers. Department store chains Nordstrom and Kohl’s are due to report but are not expected to set the world on fire, following Macy’s nearly 10% slide last week on weak figures.
Although Macy’s results exceeded expectations in the second quarter, sales were mixed, and the outlook for revenues and gross margins has been revised downward to 2025. This underperformance is attributed to deteriorating store performance due to a lack of investment and excessive inventory.
Clothing chains Gap, Guess, L Brands, and Abercrombie & Fitch are also set to report, along with deep discounter Dollar General. Campbell Soup, electronics chain Best Buy, and Lululemon are also due to report.